GM posts loss, vows to repay U.S. early

By Kevin Krolicki and David Bailey

DETROIT (Reuters) - General Motors Co GM.UL on Monday said it had lost $1.2 billion since emerging from a government-sponsored bankruptcy but said its business was stabilizing and vowed a quick repayment of $8 billion owed to the United States and Canada.

The results gave analysts and potential investors the first look at GM's books since the top U.S. automaker emerged from a fast-track sale out of bankruptcy engineered and financed by the Obama administration in July.

The "new GM" has cut 34,000 jobs globally from the start of the year, eliminated $78 billion of debt and built up a cash hoard of almost $43 billion thanks to its bailout. It has also cut its U.S. inventories of unsold vehicles in half.

But revenue for the third quarter dropped 26 percent to $28 billion. GM posted a net loss of $1.2 billion (712 million pounds) for the period from its July 10 bankruptcy emergence to the end of September.

Analysts said the results underscored the pressure facing the automaker even after a $50-billion financing package that has made the U.S. government a 61-percent owner.

"They are still on life support as a business and they are going to continue to be," said Mirko Mikelic, a portfolio manager at Fifth Third Bank in Grand Rapids, Michigan.

Chief Executive Fritz Henderson said the results showed GM has "significantly more work to do" despite topping its own targets for share and sales as it came out of bankruptcy.

"The first step in the turnaround is to stop the bleeding, stop shrinking as we get to the foundation," Henderson told financial analysts on a conference call.