GM hints at moving to profit in 2010

City A.M. Reporter
CARMAKER General Motors posted a net loss for 2009, but said it was possible to make a profit this year and that it was laying the foundation to return to public ownership.

GM reported a $4.3bn (£2.82bn) 2009 net loss covering the period from its emergence from bankruptcy in July through to the end of the year in the automaker’s first full account of its new balance sheet as a restructured company.

The automaker said it had repaid $2.8 bn of its loans from the US Treasury and Export Development Canada by the end of March and planned to repay the remaining $5.6bn by June “at the latest.”

GM, which received $50bn of US taxpayer support for the restructuring, has aimed to move faster to jump-start sales and launch an initial public offering that would allow the US government to reduce its majority stake in the automaker.

GM Chief Financial Officer Chris Liddell said he was “incredibly encouraged” by the company’s progress in the first quarter toward a profit in 2010 and said GM would never again find itself in the financial position it experienced before the bankruptcy.

“There is nothing that I’ve seen in the first quarter -- which you’ll see in a month’s time -- that changes my opinion that there is a good chance that we will be profitable this year,” Liddell said in a conference call.

After accumulating losses of about $88bn from 2005 through the first quarter of 2009, GM’s predecessor company fell into a government-supported bankruptcy. The US Treasury currently holds a stake of more than 60 per cent in the new GM.

The US Treasury expects GM eventually to be strong enough to attract sufficient investment and return to profitability. It had no comment on GM’s financial statement yesterday.

GM said its losses from July to the end of 2009 included a $2.6bn pre-tax loss related to a union retiree healthcare programme.