"2005 was one of the most difficult years in GM's history, driven by poor performance in North America," Rick Wagoner , the GM chairman and chief executive said in a statement on Thursday.

"It was a year in which two significant fundamental weaknesses in our North American operations were fully exposed - our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue."

The GM chief also said the results were "dramatically and adversely affected" by charges for restructuring and costs associated with former parts unit Delphi Corporation's Chapter 11 bankruptcy filing.

The Detroit-based auto group said the huge loss amounted to $15.13 a share, including special items, compared with net income of $2.8 billion, or $4.92 per share, in 2004.

Heavy lossess

The figures included a loss of $4.8 billion in the fourth quarter, as well as large restructuring charges.

"In order to improve financial results in 2006 and 2007, we are moving quickly to implement several important actions that will address these weaknesses in North America," Wagoner said.

"And we have a good line of sight on the steps we need to take to further reduce structural costs on a global basis that will position GM for long-term success."

"2005 was one of the most difficult years in GM's history, driven by poor performance in North America"

Rick Wagoner,
GM chairman 
 

Even without the restructuring costs, GM's loss would have been $3.4 billion for the year and $1.2 billion for the quarter, as the auto giant continued to lose market share, notably to Japanese manufacturers.

Costly oil

GM has been suffering as US customers shift away from GM's once-profitable trucks and sport utility vehicles in the face of near-record fuel costs.

GM North America recorded an adjusted loss of $5.6 billion in 2005 and $1.5 billion in the past quarter, GM said, reflecting this customer shift and high costs of US manufacturing.

"GM's top priority is to restore our North American operations to profitability and positive cash flow as quickly as possible," Wagoner said.

"In 2005, we laid out a comprehensive and integrated strategy to address the structural issues that impede our competitiveness and profitability, and we are focused on rapidly executing all aspects of the turnaround plan."

Good sales

Overall revenue was $192.6 billion in 2005, compared with $193.5 billion in 2004. Over the past quarter, revenue fell to $51.2 billion from $51.4 billion in the comparable period of 2004.

GM sold 9.2 million vehicles
worldwide in 2005

Despite the unprecedented losses, GM sold 9.2 million vehicles worldwide in 2005, the second-largest volume in its history. GM said it set sales records in its Asia Pacific and Latin America, Africa and Middle East regions. European sales were up 1.3%, but unit sales were down 3.1% in North America in 2005.

As a result, GM's share of the global automotive market was 14.2% in 2005, down from 14.4% in 2004.

The GM announcement came as US President George Bush said American automakers must make a "product that is relevant" instead of contemplating a bailout.

Government rescue?

In an interview with The Wall Street Journal, Bush said when asked about a possible bailout of troubled US automakers: "I would hope I wouldn't be asked to make that decision.

"I think it's very important for the market to function. And I haven't been asked by any automobile manufacturer for a bailout," he added.

"In terms of competitiveness, we live in a world in which a Ford or GM has got to compete with other manufacturers that are able to deal with costs in a different way than they are, as well as coming up with product that is relevant."