GM Says Improved Quarter Shows Signs Of Stability

DEE-ANN DURBIN

DETROIT (AP) — General Motors, its river of red ink stemmed by a trip through bankruptcy court, reported a narrower quarterly loss and said it would start repaying billions of dollars in government loans that helped keep it alive.

GM lost $1.2 billion for the third quarter — far less than the $6 billion it lost in the first three months of the year, before GM was transformed by a stay in Chapter 11. The company credited a sharp reduction in debt and sales of new models.

In what it called a sign of progress, GM also pledged to start paying back $6.7 billion in U.S. loans. But the money will come from a contingency account full of government cash, leading critics to question just how healthy the automaker really is.

In one sign GM is indeed on firmer footing, it took in $3.3 billion more in cash than it spent in the third quarter. In the first quarter, the last one for which it reported results, GM burned through $10 billion in cash.

GM warned it will face other costs that will bring down earnings in the coming months, including restructuring in Europe and as much as $700 million to shutter dealerships. And there are still questions about the strength of the auto market and the economy.