GM Posts $15.5 Billion Loss on Lease Costs, Sales Decline, Labor Dispute

[marmar]

from Bloomberg:



GM Posts $15.5 Billion Loss on Lease Costs, U.S. Sales Slump

By Greg Bensinger and Jeff Green

Aug. 1 (Bloomberg) -- General Motors Corp., the largest U.S. automaker, reported a second-quarter loss of $15.5 billion because of strains from truck leases, costs from labor disputes and plunging U.S. sales.

The deficit of $27.33 a share marks GM's fourth straight quarterly loss and compares with a profit of $891 million, or $1.56, a year earlier. Sales fell 18 percent to $38.2 billion, the Detroit-based automaker said in a statement today.

The mounting losses are siphoning resources Chief Executive Officer Rick Wagoner, 55, needs to develop fuel-saving cars to replace the pickup trucks and sport-utility vehicles being abandoned by U.S. buyers. Wagoner, now in his 9th year as CEO, won't project when GM will restore profit as he cuts costs by an additional $9 billion annually and carries out a plan to boost cash by as much as $17 billion.

``The trends that are out of their control, those are the things that have the potential to overwhelm them,'' Robert Schulz, a debt analyst at Standard & Poor's, said yesterday. He was referring to record gasoline prices that have transformed consumer behavior while a weakened U.S. economy drains auto sales to 15-year lows. ``We don't see the macro environment anywhere near on the mend,'' Schulz said.

GM's U.S. sales dropped 16 percent through June. Analysts surveyed by Bloomberg expect the automaker to report a decline in that range when July results are released today. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a16RwRZTmGsc&refer=home

[Deja Q]

1. Damn laborers. What if they worked for nothing?

But then, who'd be able to afford the cars, which in turn leads to a far bigger loss for the CEO?