11/07/07

GM Posts Record $39 Billion 3rd Quarter Loss

A country song said in America the music was sold by lawyers, but car manufacturing is definitely done by accountants. Just look at GM's 3rd quarter financial report. Anybody who can translate Russian into Chinese on the fly, please step forward.

General Motors reported a net loss of $38.96 billion, un-huh that is a "B", based on a $38.6 billion charge related to tax accounting. Unclaimed tax credits, on the books without profits to offset, were the culprit.

Adjusted losses in North American operations and Germany over the past three years, and at GMAC Financial Services unit, took the blame for triggering the accounting rule.

Analysts had expected the carmaker to post a loss, excluding items, of 22-36 cents a share. Instead, GM lost $68.85 a share. Excluding the tax writedown, the loss was $2.80 a share.

GM lost $147 million, or 26 cents per share, in the third quarter last year.

At the NYSE, GM shares fell as low as $34.35 ahead of the open, after closing at $36.16 the day before.

Iraq is not the only place where billions of bucks just disappear.

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