GM Earnings: Here's Why They Were So Bad

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We knew GM's second quarter earnings would be ugly, but I'm not sure many people expected this kind of number. Certainly Wall Street didn't since the estimate was for GM to lose $1.489 billion. Turns out Gm's loss was 4 times worse: $6.3 billion. Factor in charges, and GM lost $15.5 billion dollars last quarter.

What was the problem? The biggest hit came from GM's auto business which lost $4 billion. You can blame most of that on GM's North American business which has plummeted. In fact revenue in the company's North American auto operations plunged a whopping $8 billion, roughly 33%.

While Chairman and CEO Rick Wagoner told me this morning that GM has the liquidity it needs to turn things around by 2010, he's not ready to say that we've seen the bottom in this weak auto market. We'll find out how weak it is later today when GM reports July sales. Wagoner says July felt much like June. In other words. The sales will be weak (and in fact, all the automakers except for Honda are expected to report poor monthly sales).


Video: A look at the company's earnings and outlook, with Rick Wagoner, GM CEO.

Saving GM
Given GM's huge quarterly loss, the question of whether GM has the right game plan to turn things around is more important than ever. We look at GM's blueprint to fix it's massive problems in our CNBC Original Documentary Saving GM, which airs next Wednesday at 9 PM Eastern.

You'll find GM Vice Chairman Bob Lutz comments about GM catching up to and passing Toyota particularly interesting. It's part of a one hour all access look at the world's largest automaker that stretches from Detroit, to China, to Australia. Tune in and judge for yourself if GM has what it takes to stop it's money losing ways.

CNBC Original Productions: Saving General Motors
CNBC Original Productions: Saving General Motors

Questions? Comments? BehindTheWheel@cnbc.com