GM posts loss, offers workers buyouts

DETROIT (Reuters) - General Motors Corp on Tuesday posted a quarterly loss reflecting a slump in its North American market and losses at former finance subsidiary GMAC and said it would offer buyouts or early retirements to all U.S. hourly workers represented by the United Auto Workers.

The sweeping deal with the union, which covers 74,000 workers, will clear the way for GM to hire lower-cost replacements. The No. 1 U.S. automaker said those buyouts would start to generate savings by the second half of 2008.

GM has said the first half of 2008 is likely to be tough for industry sales in North America, but it expects to see a rebound in the second half of the year.

Chief Financial Officer Fritz Henderson said January sales results strengthened that view after a fourth quarter that was hurt by lower North American production and deeper discounting on the automaker's pickup trucks.

For the year, GM expects to post improved global automotive results driven by emerging markets but declined to offer a more specific forecast for the crucial and troubled U.S. market, still its largest.

"We are talking about global automotive operations. That is where we see an improvement," Henderson told reporters. "We are not really breaking it down between what regions are going to be the drivers."

NORTH AMERICA SWAMPED

For the fourth-quarter, GM posted a net loss of $722 million, or $1.28 per share, in the fourth quarter, compared with net income of $950 million, or $1.68 per share, a year earlier.

GM posted combined losses of almost $1.7 billion in North America and Europe that swamped gains of $437 million from operations in emerging markets in Asia and Latin America.

Excluding one-time items, GM posted a fourth-quarter profit of 8 cents per share for the fourth quarter that reflected a $1.6-billion tax accounting adjustment that boosted reported results for continuing operations.

Analysts surveyed by Reuters Estimates had forecast an adjusted per-share loss of 61 cents for GM, but it was not immediately clear how fully that reflected the tax gain the automaker booked in the fourth-quarter.

Shares of GM, which had gained 5 percent on Monday, initially moved higher after the quarterly results were announced, but they retreated to trade down 1.5 percent later in pre-market action.

GM's fourth-quarter revenue fell to $47.09 billion, from $50.8 billion in the same quarter a year earlier, a drop attributed to the spin-off of GMAC.

Auto revenue rose $3 billion to $46.7 billion on gains in Latin America, Asia and Eastern Europe.

GMAC, GM's former financing arm, reported a fourth-quarter net loss of $724 million a week ago. GM sold GMAC to a group led by Cerberus Capital Management, but retained a 49 percent stake that still contributes to the automaker's results.

GMAC's Residential Capital LLC unit is the second-largest independent U.S. mortgage lender.

GM ended 2007 with $27.3 billion in cash and marketable securities, up from $26.4 billion a year earlier.

Henderson said GM's pension plan, including reserves for factory and white-collar workers, was overfunded by about $20 billion at the end of 2007.