GM reports $1.2B loss, says it shows progress

General Motors Co. says it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than
it has reported in previous quarters and a sign that the auto giant is starting to turn around its business.

The
company also says it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It
could pay off the full amount by 2011, four years ahead of schedule.

The company cautioned Monday that the earnings
numbers mean little because they don’t comply with U.S. accounting standards and cover only the part of the quarter after
GM left Chapter 11 bankruptcy protection on July 10.

Even more unusual is the $79.4 billion profit the troubled
automaker is reporting for the first nine days of the third quarter, when it remained under bankruptcy court protection but
was able to scrap colossal amounts of debt and other obligations from its balance sheet.

"We have significantly
more work to do, but today’s results provide evidence of the solid foundation we are building for the new GM," CEO Fritz
Henderson said in a statement.

Chief Financial Officer Ray Young said it’s impossible to compare the third-quarter
results to any previous quarter because GM is still reviewing the value of its assets and liabilities post-bankruptcy to comply
with accounting principles.

"Direct comparisons are not necessarily applicable. You can make some judgments
in terms of trends," Young said.

GM maintains the numbers show a company making progress, riding dramatically
reduced structural costs to a far better performance than the $6 billion loss GM reported in the first quarter, the last full
quarter for which its numbers met accounting standards.

GM took in $3.3 billion more cash than it spent for the
third quarter, far better than the $10 billion the company burned through during the first quarter.

Its third-quarter
revenue totaled $26.4 billion, also an improvement over the first quarter when it saw revenue drop nearly 50 percent from
the same period in 2008 to $22.4 billion. Revenue was aided by sales boosts in July and August from the government’s Cash
for Clunkers rebates.

GM said its global market share was 11.9 percent in the third quarter, up three percentage
points from the first half of the year. The U.S. share stayed flat for the quarter at 19.5 percent.

Many customers
stayed away from GM showrooms in the first and second quarters, fearing the company wouldn’t be around to honor warranties
and service their vehicles.

Young said GM accountants are in the process of cleaning up the new company’s books,
revaluing assets and liabilities and changes to pension and health care costs that came from bankruptcy and a new contract
with the United Auto Workers union.

GM expects to meet accounting standards when it reports full-year results for
fiscal 2009, but those figures probably won’t be released until March as accountants go through the complex process of figuring
out just how much the company is now worth.

But Young said the third-quarter results still are useful to management
in spotting trends and measuring whether the company is making progress.

GM lost $78 billion from 2006 through
the first quarter of this year. The gargantuan losses and debt eventually choked the company to the point where it could no
longer operate without government help.

GM entered bankruptcy protection with roughly $94.7 billion in debt. It
emerged with $17 billion, including the $6.7 billion owed to the U.S. government. The government has given GM a total of $52
billion, $45.3 billion in exchange for a 61 percent equity stake in the company.

GM has said it plans to sell stock
to the public late next year so taxpayers can recoup at least part of their remaining investment, though GM Chairman Ed Whitacre
said last week the timing of any GM IPO remains uncertain and depends on when the company returns to profitability.