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Last Updated: Thursday, 3 May 2007, 13:05 GMT 14:05 UK
Sub-prime mortgage crisis hits GM
A Chevrolet truck, made by General Motors
GM is in the middle of a restructuring programme after losing billions
General Motors has become the latest victim of the US sub-prime mortgage lending crisis.

Its GMAC finance arm made a loss of $305m (152m) in the first three months of the year because of charges taken at its housing finance unit.

GM sold 51% of GMAC to a group led by Cerberus Capital Management last year.

GMAC's losses offset improvements at GM's automotive operations, leaving three month net profits at $62m, down from $602m in the same period of 2006.

34,000 jobs cut

Toyota overtook GM as the world's biggest car maker earlier this year.

GM is in the middle of a restructuring process that will involve cutting more than 34,000 jobs and closing 12 plants.

The firm lost more than $10bn in 2005 and another $2bn in 2006.

Many lenders have been hit by the problems facing sub-prime lenders, which provide mortgages to people with poor credit ratings.

They hit problems in the US earlier in the year because rising interest rates had increased the number of people defaulting on their payments.

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