GM has announced significant second quarter losses of $15.5bn.

General Motors (GM) has reported a second quarter financial loss of US$15.5 billion (about £8bn) and has introduced plans to improve its 2009 cash flow by $10bn.

The losses, attributed to the poor US economy, local industrial strikes and the increased cost of oil, were anticipated by the company and have led to the implementation of cost-saving measures to help counteract the effects. The measures include job cuts, a reduction in truck manufacturing, and a consolidation of sales and marketing budgets.

Rick Wagoner, GM Chairman and CEO, commented on the results: “As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the US economy and auto market, and we continue to take the aggressive steps necessary to transform our US operations. We have the right plan for GM, driven by our great products, building strong brands, fuel-economy technology leadership and taking full advantage of global growth opportunities.”

However, not all areas of the GM corporation experienced losses: GME (GM Europe) achieved record second-quarter sales, including a growth in sales of 48% in Russia; GMLAAM (GM Latin America, Africa and Middle East) improved its year-on-year earnings by almost 50%; and, although overall production of cars was down 20%, sales of GM’s popular Chevrolet Malibu and Cadillac CTS increased 113% and 33% respectively.

Speaking at the announcement of GM’s strategy to substantially improve its cost flow, Wagoner explained: “These tough but necessary actions, along with current cash and available credit lines, will provide us with ample liquidity through 2009, even under conservative US industry sales assumptions of just 14 million light vehicles in both 2008 and 2009, and continuing high oil prices…

“In short, our plan is not a plan to survive. It is a plan to win.”