January 27, 2006	Friday	Zilhaj 26, 1426

DETROIT, Jan 26: General Motors Corp. on Thursday posted $8.6 billion loss for 2005 and said it had been “one of the most difficult years” in its history.

Losses stemmed from a sharp drop in demand for its highly profitable sports utility vehicles, massive charges for restructuring and the bankruptcy of its former parts subsidiary, Delphi Corp.

GM, like Ford Motor Co., has announced huge job cuts and plant closures to combat its falling share.

While the world’s largest automaker vowed to improve its performance in 2006 and 2007, it would not forecast a return to profitability.

“2005 was one of the most difficult years in GM’s history, driven by poor performance in North America,” GM chairman and chief executive Rick Wagoner said in a statement.

“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.”

The Detroit-based group said the loss amounted to $15.13 a share, compared with net income of $2.8 billion, or $4.92 per share, in 2004.

“The fourth quarter results suggest that the hole from which GM must dig out is deeper than anticipated,” said Credit Suisse First Boston analyst Chris Ceraso, who downgraded GM stock to neutral from overweight.

Analysts had been expecting a loss of just $4.17 a share.

More than half of the losses stemmed from special items, including approximately $800 million to pay the salaries and benefits of 30,000 laid off workers and $500 million in charges associated with the shuttering of 12 facilities.

GM also took a pre-tax charge of $3.6 billion in anticipation of being required to assume the pension and health care obligations of employees at bankrupt former subsidiary Delphi Corp.

Even without restructuring costs, GM’s loss would have been $3.4 billion for the year and $1.2 billion for the quarter, as the auto giant continued to lose market share, notably to Japanese rivals.—AFP