GM posts record US automotive loss

General Motors Corp has reported a $US38.7 billion ($A42.81 billion) loss for 2007, the largest annual loss ever for an automotive company.

The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its US hourly workers who are represented by the United Auto Workers, in hopes of replacing some of them with lower-paid help.

GM would not say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $US28 ($A30.98) per hour.

Ford Motor Co and Chrysler LLC already have announced similar buyout offers.

GM's annual loss of $US38.7 billion ($A43 billion) largely was due to a third-quarter charge related to unused tax credits.

The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.

The earnings report and buyback offer came as GM struggles to turn around its North American business as the economy weakens.

But GM chairman and chief executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labour agreement and growing aggressively in Latin America and Asia.

The White House said the losses recorded by GM were a sign that the industry was going through tough times but that it would ultimately pull through the slump.

"They're trying to restructure in ways that can help keep them competitive in the future and we're confident that over time that they're going to be successful in doing that," White House spokeswoman Dana Perino told reporters.

Source: AAP 2008

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