General Motors Co posted a net loss for 2009, but said it was possible to make a profit this year and that it was laying the foundation to return to public ownership.
GM reported a $4.3 billion 2009 net loss covering the period from its emergence from bankruptcy in July through the end of the year in the automaker's first full account of its new balance sheet as a restructured company.
The automaker said it had repaid $2.8 billion of its loans from the U.S. Treasury and Export Development Canada by the end of March and planned to repay the remaining $5.6 billion by June at the latest.
GM, which received $50 billion of U.S. taxpayer support for the restructuring, has aimed to move faster to jump-start sales and launch an initial public offering that would allow the U.S. government to reduce its majority stake in the automaker.
GM Chief Financial Officer Chris Liddell said he was incredibly encouraged by the company's progress in the first quarter toward a profit in 2010 and said GM would never again find itself in the financial position it experienced before the bankruptcy.
There is nothing that I've seen in the first quarter -- which you'll see in a month's time -- that changes my opinion that there is a good chance that we will be profitable this year, Liddell said in a conference call.
After accumulating losses of about $88 billion from 2005 through the first quarter of 2009, GM's predecessor company fell into a government-supported bankruptcy. The U.S. Treasury currently holds a stake of more than 60 percent in the new GM.
The U.S. Treasury expects GM eventually to be strong enough to attract sufficient investment and return to profitability. It had no comment on GM's financial statement on Wednesday.
GM GENERATES CASH FROM JULY-DECEMBER
I think they've got a modest to good chance of becoming profitable in one of the quarters this year, said Mike Boudreau, of the turnaround firm O'Keefe & Associates, citing improvements in the economy and reduced structural costs.
GM generated $1 billion of operating cash during the period from its emergence from bankruptcy until the end of the year, but said significant work remained.
In the results released on Wednesday, GM said its losses from July to the end of 2009 included a $2.6 billion pretax loss related to a United Auto Workers union retiree healthcare program and $1.3 billion for foreign currency adjustments.
For the fourth quarter, GM reported a $3.4 billion net loss and revenue of $32.3 billion.
GM ended 2009 with $36.2 billion in cash, compared with $14.2 billion at the end of 2008.
The restructuring helped the new GM eliminate debt and build its cash, but the automaker's sales overall remain under pressure after its elimination of unprofitable brands.
GM is shutting down the Pontiac, Saturn and Hummer brands and has sold the Swedish Saab brand to Spyker Cars
The automaker's U.S. sales were up 17 percent in the first quarter from a year earlier when the industry was hitting its lowest levels since the early 1980s and GM was sliding toward bankruptcy.
However, GM's U.S. market share of 18.7 percent in the first quarter was down from 19.6 percent for all of 2009, a year in which it lost 2.5 percentage points of U.S. share.
Chief Executive Ed Whitacre, who replaced CEO Fritz Henderson in December, has shaken up senior management including its sales and marketing teams in recent months to push for a faster turnaround.
GM's global market share dropped to 11.6 percent in 2009, down from 12.4 percent in 2008, with sales overall at about 7.5 million vehicles last year including medium and heavy trucks.
Liddell said GM did not need U.S. auto industry sales to increase significantly in 2010 from last year for the company to be profitable this year.
U.S. auto industry sales fell to about 10.4 million vehicles in 2009, the worst result since the early 1980s. Most industry experts expect sales to increase to a range of 11.5 million vehicles to 12.5 million in 2010.
(Additional reporting by David Bailey, editing by Gerald E. McCormick and Matthew Lewis)