* Loss excluding items $9.66/share, within expectations
* Revenue down 47 pct to $22.4 bln amid global downturn
* Burns through $10.2 bln; aims at further restructuring
* GM shares down 4.2 pct
(Adds details from GM conference call, presentation)
By Kevin Krolicki and David Bailey
DETROIT, May 7 (Reuters) - General Motors Corp GM.N said
it burned through $10.2 billion in the first quarter as it
relied on a federal bailout to ride out a sharp decline in
global sales that overwhelmed its cost-cutting efforts.
Revenue dropped by almost half to $22.4 billion as the
company cut production by about 900,000 vehicles and worked to
run down costly inventories in the United States and Europe.
The results showed the extreme pressure on GM with just
four weeks remaining for the embattled automaker to win deals
to slash debt and operating costs with its major union and
bondholders to avoid bankruptcy.
"Results were awful, as expected, however, GM's cash burn
was even worse than we were expecting," Kip Penniman of KDP
Investment Advisors said in a note for clients.
Chief Financial Officer Ray Young said there was evidence
consumers were scared away from GM cars and trucks because of
concern the automaker was headed for bankruptcy.
GM cut $3.1 billion in operating costs in the first quarter,
including just over $1 billion in North America, but the latest
push in a four-year campaign to cut costs failed to keep pace
with the plunge in sales.
"You could not offset the revenue implosion that we
experienced here," Young told reporters following release of
the quarterly results on Thursday.
GM's North American operations, where it plans to cut 21,000
factory jobs and close and close more than 2,600 dealerships,
posted a loss before interest cost and taxes of $2.5 billion.
European operations, which Italy's Fiat SpA (FIA.MI) has
proposed taking over, posted a loss on the same basis of $1.2
billion as vehicle sales in the region dropped 29 percent.
GM still hopes to complete a debt restructuring out of
court but is readying plans for what it expects would be a
quick bankruptcy if that proves necessary, Young said.
He said GM expects to draw on the experience of Chrysler
LLC, which filed for bankruptcy last week under the supervision
of the Obama administration.
"We are very, very cognizant of this issue of revenue
perishability and how consumers react to the threat of
bankruptcy," Young said.
Young said GM would make a decision at the end of this
month on whether an offer to extinguish $24 billion in bond
debt in exchange for new shares had garnered enough support for
the company to avoid a bankruptcy filing.
GM's global market share fell to 11.2 percent in the first
quarter, down from 12.4 percent a year earlier.
DEADLINE LOOMS
GM posted a first-quarter net loss of $6 billion, compared
with a loss of $3.3 billion a year earlier. The company has
lost $88 billion since its turnaround efforts began in 2005
under former Chief Executive Rick Wagoner.
The losses are expected to mount in the current quarter
when GM shuts down U.S. manufacturing plants for up to nine
weeks in an effort to run down inventory and lessen its
exposure to bankrupt former subsidiary Delphi Corp. DPHIQ.PK
GM is negotiating with Delphi's bankruptcy lenders and the
U.S. government to try to find a way to allow the parts supplier
to emerge from bankruptcy after more than three-and-a-half
years.
"We would like to have a resolution of Delphi as soon as
possible," Young told analysts and reporters.
GM is facing a government-imposed June 1 deadline to reach
agreements to overhaul its operations and cut more than $40
billion in debt. It has taken $15.4 billion in emergency loans
from the U.S. Treasury and expects that to rise to $18 billion
by the end of the month.
The first quarter was marked by GM's failure to win backing
for a turnaround plan that the U.S. autos task force concluded
was too slow-moving to succeed. The Obama administration ousted
Wagoner as GM chief executive at the end of the quarter.
Creditors have been looking beyond GM's results, focusing
instead on whether it succeeds in winning debt concessions from
its bondholders and the United Auto Workers union.
The automaker said on Thursday that it had not yet reached
the deal it needs with the UAW.
It also said the Treasury had not yet agreed to convert
half of the loans it has extended to GM into stock in a
restructured company, as the automaker has proposed.
Young said GM was back in talks with union representatives
and ready to negotiate around the clock to reach a settlement.
The UAW faces pressure to accept GM stock in exchange for
about $10 billion the union is owed for a trust fund for
retiree healthcare. That would give the union a 39 percent
stake in the restructured company.
Under the restructuring plan GM detailed last month, the
government would own a majority stake, effectively
nationalizing the 100-year-old Detroit-based automaker.
GM shares were down 7 cents or 4.2 percent at $1.59 around
midday on the New York Stock Exchange. The company's pending
plan to issue new shares to pay off creditors would dilute the
value of the share to less than 2 cents.
(Reporting by Kevin Krolicki; editing by John Wallace and
Matthew Lewis)
