26.1.2006
GM reports preliminary 2005 financial results

Today, GM reported a 2005 calendar-year loss, excluding special items, of $3.4 billion compared with net income of $3.6 billion. Including special items, such as restructuring cost, GM reported a loss of $8.6 billion compared to net income of $2.8 billion in the year-ago period. Revenue was $192.6 billion in 2005, compared to $193.5 billion in 2004.

“2005 was one of the most difficult years in GM's history, driven by poor performance in North America,” GM Chairman and Chief Executive Officer Rick Wagoner said. “It was a year in which two significant fundamental weaknesses in our North American operations were fully exposed -- our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue. Our results were also dramatically and adversely affected by charges for restructuring and matters associated with Delphi Corp.’s Chapter 11 filing."

GM's automotive operations reported an adjusted loss of $5.3 billion in 2005, compared to adjusted earnings of $1.2 billion in 2004. The decline was principally driven by large losses in North America.

GM North America reported an adjusted loss of $5.6 billion in 2005, compared to adjusted earnings of $1.1 billion in 2004, reflecting a weaker sales mix, lower production volumes stemming from a significant reduction in dealer inventories and lower market share, increased material costs including those for product improvements, continuing high health-care costs and increased spending on marketing and advertising.

GM Europe cut its losses nearly in half in 2005 to an adjusted loss of $375 million from an adjusted loss of $742 million in 2004, as continued improvement in both structural and material costs and higher production volumes were partially offset by negative pricing. GME reported an adjusted loss of $159 million in the fourth quarter of 2005, an improvement from the adjusted loss of $345 million reported in the year-ago quarter.

“Our European turnaround plan remains on track and we expect to see more progress in 2006,” Wagoner said. “In addition to the continued implementation of our significant cost reduction initiatives, we expect to benefit again this year from the introduction of new products such as the Opel Corsa. And, we’ll continue to focus on the rollout of our multi-brand strategy in Europe, and particularly efforts to expand the Chevrolet brand.”

GM Asia Pacific (GMAP) reported adjusted earnings of $524 million in 2005, compared to $729 million in 2004, reflecting unfavorable volume and shifting sales mix at GM’s Holden unit, and higher costs associated with GM’s growth initiatives in China.

GM Latin America/Africa/Middle East (GMLAAM) reported adjusted earnings of $124 million in 2005, up from $85 million in 2004. For the fourth quarter of 2005 GMLAAM reported adjusted earnings of $20 million, compared to $47 million in the year-ago quarter, primarily driven by unfavorable foreign exchange rates in Brazil.

“GM’s top priority is to restore our North American operations to profitability and positive cash flow as quickly as possible,” Wagoner said. “In 2005, we laid out a comprehensive and integrated strategy to address the structural issues that impede our competitiveness and profitability, and we are focused on rapidly executing all aspects of the turnaround plan.”

GM sold 9.2 million vehicles worldwide in 2005, the second-largest volume in GM’s history, on the strength of increased sales in three of GM’s four business regions and all-time sales records in our Asia Pacific and Latin America, Africa and Middle East regions. Vehicle sales in the Asia Pacific region were up 20 percent, the Latin America, Africa and Middle East region increased 19 percent, and Europe posted a 1.3 percent gain in one of the most competitive markets in the world. Unit sales were down 3.1 percent in North America in 2005. As a result, GM’s share of the global automotive market was 14.2 percent in 2005, down from 14.4 percent in 2004.