“This has been a challenging year, for sure,'' GM Chief Financial Officer Fritz Henderson told reporters in Detroit.
GM is writing down tax assets because it may not be able to generate enough earnings to use the benefits. The move reflects a darkening outlook for the US economy, as GM cited mortgage-related losses at its partly owned GMAC LLC finance unit and “more challenging” auto-market conditions in the US and Germany.

GM’s loss of $68.85 per share widened from a deficit of $147 million, a year earlier. The non-cash charge is related to deferred tax assets in the US, Canada and Germany, the Detroit-based company said in a statement.

Significant factors

GM said the results also reflected an after-tax gain of $3.9 billion from the sale of its Allison Transmission unit, $1.6 billion in pension-service costs related to prior labor agreements, and $400 million in charges connected to its former Delphi Corp. subsidiary.

Mr Henderson said the losses at GMAC’s mortgage unit and strengthening Canadian dollar against the US dollar were significant factors in the wider-than-expected loss. The Canadian currency has risen 28.3 per cent against the US dollar this year.

The automaker attributed the charge to a “three-year historical cumulative loss” in the U.S., Canada and Germany, without elaborating.

GM had a net loss of $757 million related to its 49 per cent stake in GMAC, which posted a $1.6 billion third-quarter loss on November 1. GM sold 51 per cent of GMAC last year to group led by Cerberus Capital Management LP.

Mr Henderson said he couldn’t estimate when GM might be able to use deferred tax assets again and declined to forecast when the automaker might return to profit.

“Certainly having ResCap turn into the red, then bringing GMAC into the red, has an impact on us,” he said.

GM reported deferred tax assets of $34.8 billion in the US., $3.1 billion in Canada and $2.5 billion in Germany as of end of last year, in an annual regulatory filing in March. The three countries accounted for $40.4 billion of GM’s $40.8 billion in such assets, according to that filing.

Today’s results including the tax-related charge may overshadow GM retaking the No 1 spot in worldwide sales from Toyota Motor Corp Chief Executive Officer Rick Wagoner also moved to reduce future costs by approving a labor accord that eliminates retiree health-care obligations and cuts new workers’ pay by 50 per cent.