The new General Motors (“GM”), formed after emerging from bankruptcy on July 10, 2009 through the acquisition of substantially all the assets and certain liabilities of Motors Liquidation Company or old GM, lost $4.3 billion or $10.73 per share for the period July 10–December 31, 2009. The loss included a $2.6 billion pretax loss related to a United Auto Workers (UAW) union’s retiree healthcare program and $1.3 billion for foreign currency adjustments. The new GM’s financial results were not comparable with the earlier periods as it reported under “fresh start accounting”.
GM generated revenues of $57.5 billion during the period. The automaker sold 7.5 million vehicles in 2009 compared to 8.4 million vehicles in the previous year. Consequently, its global market share dipped to 11.6% from 12.4% in 2008.
GM’s cash and marketable securities improved to $22.8 billion as of December 31, 2009 from $14.2 billion as of December 31, 2008. Total debt amounted to $15.8 billion, translating into a debt-to-capitalization ratio of 43%. During July 10–December 31, 2009, the company generated an operating cash flow of $1 billion.
GM is on track to repay its outstanding $6.7 billion (13% of the $52 billion that U.S. taxpayers have invested in the company, mainly for a 61% ownership stake) in U.S. Treasury loans as well as the C$1.5 billion ($1.5 billion) in Export Development Canada loans, ahead of the scheduled maturity date of July 2015. As of March 2010, the company had paid $2.8 billion. GM plans to repay the rest by June at the latest.
Post-bankruptcy, GM is primarily owned by the U.S. government and Canada government, and by a trust fund providing medical benefits to UAW retirees. Specifically, the U.S. government holds a 61% stake, the UAW union holds a 17.5% stake through its Retiree Medical Benefits Trust and the Canadian government holds 11.7%. The remaining shares went to the bondholders of the old company.
The new GM retained the Chevrolet, Cadillac, GMC and Buick core brands, along with most of its overseas operations. These brands will have a total of 34 U.S. nameplates by 2010.
GM has lost $88 billion since 2005 as its debt rose to a staggering $54 billion. The company was forced to file for Chapter 11 when it failed to cope with the downturn in the U.S. economy and the credit crunch since the second half of 2008 that caused industry-wide sales to plunge.
