Struggling General Motors Hit By $4.8bn Loss

General Motors, the world’s largest carmaker, today unveiled a fourth-quarter loss of $4.8bn (£2.6bn) as it struggled in its home market.

Losses at GM ballooned from $99m a year ago, with the company hit by one-off charges. These included restructuring costs of $1.3bn in North America and a $2.3bn charge associated with the bankruptcy of Delphi, its former parts division.

GM said it expected to spend between $3.6bn and $12bn on benefits promised to Delphi workers. Excluding the one-off charges, the company’s loss came to $1.2bn.

The fourth-quarter deficit brought GM’s net loss for the full year, revealed by the GM chairman and chief executive, Rick Wagoner, to $8.6bn.

GM sold 9.2m vehicles worldwide in 2005 - the second highest total ever achieved by the company. It also sold record number of cars in Asia, Latin America, Africa and the Middle East, while sales in Europe were up a modest 1.3%.

However, North American losses overwhelmed those gains, and GM’s worldwide market share was down slightly, falling to 14.2% from 14.4% in 2004.

The carmaker struggled in its domestic market, where it has been weighed down by high labor and raw materials costs. It has also suffered a loss of market share to foreign rivals and disappointing sales of high-margin sports utility vehicles.

GM last year announced that it would cut 30,000 jobs from its north American workforce.

Its rivals Ford and DaimlerChrysler have also recently announced thousands of job losses. Waves of job cuts have devastated cities built on industry, with Detroit - Ford and GM’s home town - now the poorest big city in the US.

Mr Wagoner said GM was moving forward with recovery plans that also include initiatives to cut costs by $4bn, largely through a healthcare agreement with the United Auto Workers union and manufacturing improvements.