Associated Press

DETROIT General Motors Corp. reported a US$38.7-billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some with lower-paid help.
The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens.
But GM chairman and CEO Rick Wagoner said the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labour agreement and growing aggressively in Latin America and Asia.
The Detroit-based automaker is offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.
GM wont say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to 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 shares fell 65 cents, or 2.4 per cent, to $26.47 in premarket trading.
GMs annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.
The 2007 loss topped GMs previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poors Compustat.
Excluding the tax charge and other special items, GM lost $23 million, or four cents per share, for the year, compared with net income of $2.2 billion in 2006, beating Wall Streets expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.
For the fourth quarter, GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GMs former parts division, for its restructuring efforts.
GM reported $181 billion in revenues for the year, down from $206 billion in 2006. Its automotive business saw record automotive revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favourable exchange rates.
General Motors was profitable in every region outside North America.
GMs Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, up 140 per cent from 2006. GMs Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.
But GMs North American division continued to struggle, posting a $1.5-billion loss for the year, nearly identical to its $1.6-billion loss in 2006. GMs North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.
Wagoner said the weak U.S. economy and high commodity prices hurt turnaround efforts in North America. He said GMs decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected U.S. sales.
Were pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow, Wagoner said.
GMs results were also dragged down by its 49 per cent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1-billion loss attributed to GMAC.
GM barely retained its title as the worlds largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 per cent from the year before.