DOW JONES NEWSWIRES

General Motors Corp. (GM) posted a stunning $15.5 billion second-quarter net loss, as the auto maker piled up $9.1 billion in charges and write-downs and suffered a deep drop in North American sales.

The company had warned in mid-July that it would post "a significant second quarter loss." But the actual numbers were far worse than analysts had expected, and point to the enormous challenges facing GM as buyers turn away en masse from its most profitable offerings.

GM shares fell more than 7% in premarket trading to $10.20.

GM reported a net loss of $27.33 a share, compared with net income of $891 million, or $1.56 a share, a year earlier. Excluding items, the loss was $6.3 billion, or $11.21 a share.

Revenue fell 18% to $38.2 billion.

Analysts surveyed by Thomson Reuters had been looking for a loss, excluding items, of $2.62 a share on revenue of $44.57 billion.

GM's Latin American operation was a bright spot - profit rose to $445 million from $296 million. But Asia swung to loss and European profits tumbled 94%.

Excluding charges, the North American business had a $4.3 billion loss as revenue dropped by one-third to $19.8 billion, pushing market share down to 20.2% from 22.7%.

A year ago, GM swung to a second-quarter profit as it relied on continued strength in international operations and a slim profit in its core North American automotive unit to dramatically improve its bottom line.

GM's earnings were also dented by a $1.2 billion loss from its 49% stake in its GMAC LLC financing arm. Thursday, GMAC swung to a second-quarter loss as it took a $716 million write-down on leases and recorded more losses from its Residential Capital LLC unit.

Second-quarter cash levels fell to $21 billion at the end of the second quarter from $23.9 billion at the end of the first quarter.

The dismal second quarter caps four consecutive years of disappointing results, dating back to the beginning of 2005, when GM shocked Wall Street with an abrupt string of deep losses. Since then, Chief Executive Rick Wagoner has been racing to cut costs, slim down operations and remake the vehicle portfolio. At the same time, Wagoner has invested heavily into emerging markets, placing big bets in Latin America, Eastern Europe and Asia even as market share dwindles at home.

GM launched an extensive corporate restructuring in 2005. While red ink has become status quo at GM, analysts are focused sharply on cash flow as liquidity shrinks significantly due to North American weakness and the challenge from Asian auto makers such as Toyota Motor Corp. (TM), which is battling GM for the title of world's largest auto maker.

Last week, GM reported it sold 2.3 million vehicles in the second quarter, compared with 2.4 million a year ago. That put GM, until recently the world's largest auto maker by sales, further behind Toyota. In the first six months of 2008, Toyota sold 4.8 million vehicles globally, and GM 4.5 million.

GM is looking to cut its U.S. salaried headcount by 15%, or about 5,000 workers, by Nov. 1 as part of a plan to cut $10 billion in annual expenses, Dow Jones reported this week, citing sources briefed on the plan. The auto maker previously said it was planning a 20% reduction in salaried-worker costs, including a combination of benefit reductions and job cuts.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http:// www.djnewsplus.com/al?rnd=DH3lPMl3%2BwxoeLrPETJcbQ%3D%3D. You can use this link on the day this article is published and the following day.

  (END) Dow Jones Newswires
  08-01-08 0743ET
  Copyright (c) 2008 Dow Jones & Company, Inc.