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GM Sets $1 Billion in Charges

The pretax expense covers product lines and staff reductions.
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Shares of



skidded some more Tuesday after the largest U.S. automaker said it would take pretax asset writedowns totaling nearly $1 billion in the fourth quarter.

The stock closed down 36 cents, or 1%, to $36.77 after GM revealed a series of charges to fourth-quarter earnings, which are due out Wednesday.

GM will take a pretax charge of $609 million for "assets primarily related to certain product lines," along with another pretax charge for $220 million for its investment in Fiat Auto. Also, GM will give up $52 million before taxes for its Baltimore assembly plant that it plans to close sometime in 2005, and $75 million before taxes related to 950 employees it plans to lay off at its assembly plant in Linden, N.J.

Analysts on Wall Street expect GM to report fourth-quarter earnings of 91 cents a share, according to consensus estimates reported by Thomson First Call. That would mark a 25% decline from last year's earnings of $1.22 a share for the same quarter.

GM shares have lost 8% since the beginning of the year, as concerns about the company's competitive position and credit rating have led to questions about its long-term prospects.