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February 13, 2008

General Motors reports losses of $722 millions

General Motors’ stock fell 54 cents, and now stands at $26.58. The world’s biggest automaker blamed rising costs in North America and a loss at its partially owned GMAC finance unit, for the fourth quarter’s loss of $722 millions.

Last year, General Motors Corp. posted a fourth quarter profit of $950 millions. The Detroit-based automaker’s sales fell to $47 billions.

GMAC International Finance, the former financing arm of General Motors Corp. lost $2.3 billion last year as record U.S. home foreclosures led to an increase in bad loans and auto-lending profit declined, said the Detroit based company.

In terms of its results, they were overall a bit weaker than expected and it looks like it will be a true challenge for GMAC to achieve its goal of being profitable in 2008. However, lower interest rates will help offset any higher borrowing spreads.

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5 Responses to “General Motors reports losses of $722 millions”

  1. General Motors is Looking for Partner | What the Finance Says:

    [...] facing severe liquidity problems since the beginning of the year, when it posted a fourth quarter loss of $722 millions . This came as a result of a substantial loss at its partially owned GMAC finance unit, rising [...]

  2. GM, Chrysler Struggling to Survive | What the Finance Says:

    [...] February last year, General Motors reported a fourth quarter’s loss of $722 millions which signalled the threat of bankruptcy. Five months later, analysts warned investors that the [...]

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