General Motors dollars 23.5bn in red

GENERAL MOTORS yesterday reported a 1992 loss that was almost equal to its entire stock market value, but managed to eke out a thin operating profit for the final quarter of the year.

The loss for the year, dollars 23.5bn (pounds 16.5bn), was more than three times the all-time record set just the day before by its rival Ford. It was dollars 38.28 a share - just shy of GM's dollars 39.25 opening share price yesterday in New York.

The lion's share of the loss, dollars 22.2bn, however, was the result of an accounting charge to reflect GM's exposure to future employee healthcare costs and has no impact on the car maker's cash flow.

Excluding special charges and preferred dividend, GM made a profit of dollars 92m for 1992, thanks to a dollars 3.4bn reduction of losses at its troubled North American operations to dollars 4.5bn. In 1991, GM lost dollars 3.4bn before the charges for a final loss of dollars 4.4bn, or dollars 7.97 a share.

In the fourth quarter GM made an unexpectedly strong recovery, earning dollars 273m, or 10 cents a share, before the one-off healthcare accounting charge.

The year before it lost dollars 519m - a turnaround of almost dollars 800m, much of it attributable to accelerated cost-cutting by GM's new chief executive, Jack Smith, and his purchasing chief, Ignacio Lopez de Arriortua.

'What is important is that we basically ran in the black for three out of four quarters in 1992,' Richard Wagoner, GM's finance director, said.

After making more than dollars 16bn operating losses in North America since 1990, GM's 'aggressive but achievable' goal is to break even at home in the current year.

Mr Smith, who replaced Robert Stempel after a coup by GM's outside directors last November, said GM had 'addressed head-on the problems in our North American operation'. He added: 'Plans to rebuild the foundation of our future profitability are firmly on track.'

GM lost market share to its domestic rivals Ford and Chrysler in 1992, slumping to just over one third of all vehicle sales, but it managed to increase its share of the European car market to 12.5 per cent from 12.2 per cent, making it Europe's second-ranking car maker.

The company's international operations remained profitable, but overseas profits slipped in the fourth quarter to dollars 218m from dollars 286m at the end of 1991.

Worldwide, GM's factory sales also declined 1.5 per cent in the fourth quarter to 1.85 million vehicles.

But Wall Street was encouraged by the fourth-quarter profit. In midday trading in New York, GM shares were up 1 1/4 at 40 1/2.