GM Posts $15.5 Billion Loss in Q2 2008

General Motors today announced its financial results for the second quarter of 2008, which saw the largest U.S. automaker report a loss of $15.5 billion mainly due to plunging sales in its core North American market and the dramatic shift in consumer tastes from the very profitable large pick-up trucks and SUV segments to smaller and less lucrative passenger cars.

The massive second-quarter loss, which compares with an $891m net income in Q2 2007, includes $9.1 billion in special items, such as $3.3 billion relating to the GM’s North American hourly special attrition program, $2.8 billion adjustment to the Delphi reserve and $1.1 billion in restructuring and capacity related costs. Although GM posted a profit of $400 million for its automotive operations outside North America, a $4.4 billion loss in its problematic home turf resulted to an adjusted loss of $4.0 billion on automotive operations. -Continued

GM recorded $9.1 billion of special items, predominantly non-cash in nature for the current quarter or near-term periods, which include:

$3.3 billion relating to the 2008 GMNA hourly special attrition program

$2.8 billion adjustment to the Delphi reserve

$1.1 billion GMNA restructuring and capacity related costs

$1.3 billion impairment of GM’s equity interest in GMAC

$340 million Canadian Auto Workers contract-related accounting charges

$197 million related to settlement of the strike at American Axle