GM's (GM) Losses Go Global And Market Share Collapses

GM (GM) lost money in the last quarter, a total of $6 billion. That it only lost that much is a testament to its successful cost control work. The company’s revenue dropped a breathtaking 47% to $22.4 bllion. It is a miracle that reduced expenses could even come close to matching that collapse.

The really bad news was from overseas.

Anyone who keeps track of the auto industry knew that GM would do poorly in North American and Europe. GM did not disappoint the pessimists. In North America, the company’s revenue fell by half and it market share dropped from 21.7% in the region last year to 17.9% this year. GM will not become profitable in the region, no matter what it cuts, if market share continues to fall.

In Europe, GM posted a sales drop of $4.6 billion to $5.3 billion. Market share slipped 9.6% to 8.9%.

The most distressing results came from GM’s usually reliable Latin American and Asia operations. Due to an increase of sales in China of 17%, GM’s Asia market share rose from 6.9% to 8%. making it the only bright spot on the globe.

In Latin America, where GM has been a dominant presence, the firm’s market share dropped modestly to 16.9% and sales were down $1.4 billion to $3.4 billion.

The Treasury may be facing a reevaluation of GM’s prospect with its earnings showing such a broad collapse abroad. Creditors who are trying to get $27 billion back from the company will now be less likely to want to swap that for commons shares. GM is in too much trouble.

Douglas A. McIntyre