GM announced today a third quarter loss of $1.6 billion on revenue of $47.2 billion, bringing year to date losses to $3 billion.
In an effort to soften the blow, GM negotiators worked through the weekend with the UAW to come up with a tentative agreement on the critical issue of health care costs. The tentative deal will reduce health care costs by $3 billion a year, with cash savings running about $1 billion a year. However, the terms of the tentative agreement actually raise GM's potential obligations to ex-GM Delphi employees under Delphi's bankruptcy, to as much as $12 billion.
Also countering the bad news was an announcement that GM is considering the sale of a controlling interest in its profitable GMAC financial unit, and another announcement of plans to cut structural costs. The latter will mean further plant closings and job cuts of 25,000 or more by 2008.
By the end of 2006, GM is targeting a $5 billion total reduction in all structural costs, including health care.
More details here and here.
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