General Motors Reports Loss of $15.5 Billion
August 3, 2008, 2:30 am
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The struggling U.S economy took a massive toll on one of the biggest manufacturing companies in the world.
Car giant General Motors has reported a net three-month loss of $15.5bn as its North American car sales fell by nearly 20%.
GM took a huge $3.3bn charge for buying out the contracts of 19,000 hourly workers who left the fledgling company at the end of June. An estimated amount of $1.3bn was also written off because of reduced values of big, used cars. This is due to the fact that rising fuel prices have hit used-car prices.
During the same time last year, General Motors reported a net profit of $890 million... it lost $6.3bn this year without one-off charges.
General Motors plans to lay off thousands of workers, close down truck and SUV plants, sell off assets and suspend its dividend.
Apart from General Motors, other giant automobile companies like BMW, Nissan, Renault, Toyota and Ford have all reported losses ranging from 10$ to 40%.
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