For all the good in GM's 2007 results - the near-record worldwide sales, the reduction in labor costs and in retiree health obligations - there is no getting around the $38.7-billion in red ink.
The largest annual loss in the history of the auto industry signals that even with a garage full of hot vehicles and a historic new labor contract, GM has little hope of making a profit again before 2010 as the weak U.S. economy and competition eat away at its gains.
GM reported the record-setting loss Tuesday and promptly offered a new round of buyouts to 74,000 U.S. hourly workers in hopes of replacing some of them with lower-paid employees.
For the fourth quarter, GM posted a loss of $722-million, or $1.28 per share, compared with a net income of $950-million in the year-ago quarter.
Chairman and chief executive Rick Wagoner said the company made significant progress last year, reducing structural costs in North America, negotiating a new agreement with the United Auto Workers and expanding aggressively in emerging markets such as Latin America and Asia.
The company managed to hold on to its title as the world's largest automaker last year - selling just 3,000 more cars than Toyota - and was profitable in every region outside North America. It introduced hit products like the Chevrolet Malibu and a trio of crossovers.
But GM was hit by continuing losses in its home region, obligations to its former parts division Delphi Corp. and troubles at its partly owned GMAC Financial Services, which is reeling from the U.S. mortgage crisis.
The company doesn't expect to see significant earnings until at least 2010, as it reduces its work force and labor costs and transfers its retiree health care costs to a new UAW-run trust.
GM wouldn't say how many workers it hopes to shed or how much it expects the buyouts to cost, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing nonassembly jobs. The new employees will be paid half of the old wage of $28 per hour.
Under the offer, retirement-eligible workers could get between $45,000 and $62,500 as an incentive to retire with full pension and health benefits. Other workers will have the option to retire early or take up to $140,000 to leave with no pension or health care.
GM's North American division posted a $1.5-billion loss for the year, nearly identical to its loss in 2006. GM Europe, which had market share losses in Germany but gained in Russia and elsewhere, managed a profit of $55-million, down from $357-million a year earlier.
The company did better in the rest of the world, with its Latin America, Middle East and Africa division more than doubling earnings to a record $1.3-billion.