Automaker General Motors Co. (MTLQQ.PK) Monday announced its preliminary non-GAAP results, reporting a loss of $1.2 billion for the first 83 days of its operation after exiting bankruptcy. GM said that it intends to accelerate the repayment of its $6.7 billion in U.S. government loans with an initial $1.2 billion payment in December. The company expects moderation in total global vehicle industry volume in the fourth quarter, with modest growth in 2010. The company has also decided to reduce the number of dealerships in the U.S. and Canada.
GM came out from bankruptcy on July 10, acquiring its operations from Motors Liquidation Co. For the July 10-September 30 period, the company posted a managerial loss after-tax of $1.2 billion. The company recorded special items for the period of $505 million, attributed primarily to dealer restructuring, attrition-related charges and Delphi.
Interestingly, the company's predecessor old GM's managerial net income attributable to common stockholders was $79.36 billion, for the period July 1 through July 9, 2009, a nine-day period. For the three-month period ended on September 30, 2008, old GM reported a managerial net loss of $2.55 billion.
The new company's revenue for the July 10-September 30 period was $26.35 billion, while the old company generated revenues of $1.64 billion for the July 1 - July 10 period. GM's total revenue for the third quarter between July 1 and September 30 was $28 billion, up approximately $4.9 billion from the revenue recognized by old GM in the second quarter of 2009.
For the year-ago third quarter, old GM had generated total net sales and revenues of $37.81 billion.
Revenue growth was largely attributed to higher global seasonally adjusted annual rate, or SAAR, of 67.8 million units in the third quarter, compared with 62.7 million units in the sequential second quarter, and GM's stabilizing global share. In China, Brazil, India and Russia, or BRIC, GM had 13% of the combined market share in the third quarter, up 0.2 percentage points from the second quarter.
Total worldwide production volume for the third quarter declined to 1.697 million from 2.04 million a year ago. Total worldwide unit deliveries were 1.969 million for the quarter, compared with 2.11 million in the same quarter of fiscal 2008.
The company also said that its global share was 11.9% in the third quarter, an increase of 0.3 percentage points from the first half of the year for old GM. GM's U.S. market share reached 19.5%, in line with old GM's U.S. share for the first half of the year. The company ended the quarter with U.S. dealer inventories of about 424,000 vehicles, down by approximately 158,000 units from the end of the second quarter.
According to the company, its sales in the U.S. were supported by strong retail performance of some of its newest vehicles, including the Chevrolet Camaro and GMC Terrain, as well as the Chevrolet Equinox, Buick LaCrosse and Cadillac SRX. These vehicles are generating higher average transaction prices and higher residual values than previous model year vehicles.
In other markets around the world, new vehicles including the Holden and Chevrolet Cruze, Daewoo Matiz Creative, Opel/Vauxhall Astra and Chevrolet Agile are helping the company to reclaim its global share. In China, the company and its joint venture partners sold more than 478,000 vehicles in the third quarter, up from approximately 451,000 and 364,000 units in the second and first quarters, respectively.
Further, total structural cost has been reduced significantly by the resizing and delayering of the company including salaried and hourly headcount reductions, engineering savings and volume related savings. GM's structural cost for the July 10 - September 30 period reached $9.1 billion. Structural cost for old GM for the period January 1 - July 9 was $22.0 billion.
The company also said that it had positive managerial operating cash flow before special items of $3.3 billion for the July 10 -September 30 period, reflecting the favorable working capital impact from production start up, timing of supplier payments and lower capital spending. For the period between July 1 and July 9, Old GM had negative operating cash flow of $3.6 billion, reflecting extremely low production in North America. The company said that the favorable working capital impact in the period is not expected to repeat itself in the fourth quarter.
GM's total debt as of September 30 was $17 billion, including $6.7 billion in U.S. government loans, $1.4 billion in Canadian government loans, $1.3 billion in German government loans and $7.6 billion in other debt globally.
As of September 30, the company's cash and marketable securities reached $42.6 billion, which included $17.4 billion held in escrowed funds from the United States Treasury, or UST, and Export Development Canada, or EDC, $2.8 billion for the recently completed Delphi settlement and $900 million for healthcare in Canada.
For the period between January 1 and July 9, 2009, old GM reported managerial net income attributable to stockholders of $58.91 billion. Old GM's managerial net loss for the nine-month period ended on September 30, 2008 was $21.35 billion. Old GM's total net sales and revenue reached $47.11 billion in the January 1 - July 9 period this year, in comparison with $118.20 billion in the prior-year nine-month period.
GM also said it plans to accelerate repayment of its outstanding $6.7 billion in UST loans as well as the C$1.5 billion, or US$1.4 billion, in EDC loans ahead of the scheduled maturity date of July 2015. This plan is in light of improving global economic conditions, stabilizing industry sales and the company's healthier cash position.
GM plans to repay the US, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial $1.2 billion payment to be made in December, followed by quarterly payments. Any escrowed funds available as of June 30, 2010 would be used to repay the UST and EDC loans unless the escrowed funds were extended one year by the UST.
Additionally, the company stated that it has begun to repay the German government loans which were extended to support Opel, and had a balance of EUR 900 million as of September 30, 2009. Opel has already repaid EUR 500 million of that in November, and will repay the remaining EUR 400 million balance by the end of the month. The cash balance in Europe as of September 30, 2009 was US$2.9 billion.
Going forward, GM expects its total global vehicle industry volume will moderate in the fourth quarter, with an estimated SAAR of approximately 65.4 million units, down from 67.8 million units in the third quarter. Following the expiration of the 'Cash for Clunkers' stimulus program in the U.S., which contributed to GM's sales in the third quarter, the U.S. industry total vehicle SAAR volume is projected to be approximately 10.7 million units in the fourth quarter, compared to 11.7 million units in the third quarter.
Further, GM said that it expects to have negative net cash flows in the fourth quarter due to a number of factors including cash outflows relating to the Delphi settlement of $2.8 billion, the working capital impact of payment term adjustments of approximately $2 billion, payments for U.S., Canada, Ontario and Germany government loans of approximately $2.5 billion and continuing restructuring cash costs of approximately $1 billion. As a result, global cash balances at the 2009-end are expected to be materially lower than the company's third quarter levels of $42.6 billion.
In 2010, the company anticipates modest growth, with total industry volumes estimated at 62 million to 65 million units, with a modest recovery in the U.S. market. Total vehicles outlook for the U.S. market for the 2010 calendar year is estimated at 11 million to 12 million units.
Further, GM said that it has decided to reduce the number of U.S. and Canadian dealerships as part of achieving and sustaining long-term viability and the viability of the dealer network. The company plans to reduce dealerships in the U.S. to approximately 3,600 to 4,000 by October 31, 2010.
GM indicated wind-down agreements executed with 2,042 retail dealers as of October 31. The retail dealers executing wind-down agreements have agreed to terminate their dealer agreements prior to October 31, 2010. A portion of the total wind-down payments were paid upon signing the termination agreement, and the remainder will either be paid when the dealer has liquidated its new vehicle inventory and complied with other provisions of the termination agreement or over time as the dealer sells down its inventory.
Among others in the sector, Ford Motor Co. (F) reported a profit for the third quarter, helped by new products, structural cost reductions and improved results at Ford Credit. The Dearborn, Michigan-based company's net income attributable to the company was $997 million, or 29 cents per share, compared to a loss of $161 million in the year-ago period.
Ford, the only big U.S. automaker, which managed without seeking federal assistance amid economic recession, said revenue for the quarter edged down to $30.9 billion from $31.7 billion in the previous year. Looking ahead, the company now expects to be solidly profitable in 2011, although its near-term growth outlook remains uncertain.
MTLQQ.PK is trading at $0.627, up $0.066, on a volume of 4.22 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.