GM posts record US automotive loss

February 12, 2008 9:36:34 AM PST
General Motors Corp. just reported a $38.7 billion loss for 2007, marking the largest ever annual loss for an auto company.GM says it's making a new round of buyout offers to hourly workers in the U.S., hoping to replace them with lower-paid workers.

The news comes as GM struggles to turn around its North American business as the economy weakens.

Still, GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, cutting structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.

That new buyout offer is going out to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers. The company won't say how many workers it's hoping to shed, but its UAW contrace would let it replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour.

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

GM's 2007 loss of $38.7 billion largely pinned on 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.

GM shares rose 24 cents to $27.36 in morning trading Tuesday.