Fleet News

GM records 'unacceptable' fourth quarter losses

GENERAL Motors, the world's largest vehicle manufacturer, recorded 'unacceptable' losses of $463 million (£319 million) in the final quarter of last year partly due to a slowdown in sales caused by continued pricing pressures in the UK.

In addition General Motors, which includes Vauxhall in the UK, also blamed an unfavourable product mix, country mix and 'one-time' factors for its poor showing. This led the manufacturer's president and chief executive officer Rick Wagoner to comment: 'Our fourth quarter performance in Europe was unacceptable. We are taking major steps to improve operating performance, including the introduction of innovative new products, improving capacity utilisation, intensifying overall cost reduction and aggressively pursuing synergies with our alliance partners in purchasing, powertrain activities, product development and other important areas.'

New vehicles this year include the Astra Cabriolet, the Vivaro van and the new Corsa-based Combo and the company will improve the availability of diesel engines. Meanwhile, powertrain and purchasing co-operation between General Motors and Fiat following the American manufacturer's decision last year to take a 20% stake in its Italian rival is expected to save around DM110 (£37.2 million) over the next five years in purchasing alone leading to improved competitiveness and employment prospects.

In the fourth quarter of last year General Motors reported after-tax profits of $609 million (£420 million) which was down 51% from a year ago with the decline in Europe and losses at affiliate Isuzu taking the blame. One of the consequences of the decline is the 2002 closure of Vauxhall's Luton plant along with other cutbacks across European production sites and the phase-out of Oldsmobile which, with other matters, contributed to a $520 million (£358 million) special items hit on results.

The results left General Motors with a full year after-tax profit of $5 billion (£3.4 billion) excluding special items, the second highest in history following 1999's $5.7 billion (£3.9 billion) on record turnover of $183.3 billion (£125 billion) largely due to record sales in the United States of America.

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