[an error occurred while processing this directive]
BBC News
watch One-Minute World News
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.


SEE ALSO
Carmakers see US April sales slip
01 May 07 |  Business
Toyota 'world's largest carmaker'
24 Apr 07 |  Business
Rivals chase GM in Chinese markets
20 Apr 07 |  Business
Four countries share new GM Astra
17 Apr 07 |  Business
US carmakers see March sales dip
03 Apr 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites



FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

PRODUCTS & SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific