GM to report record annual loss

General Motors Corp. will announce its 2007 earnings on the morning of Tuesday, Feb. 12. The automaker is expected to announce its worst annual loss in history, due to a $39-billion paper loss in the third quarter, primarily because of a tax-accounting rule.

The loss comes even as GM announced earlier this week that 2007 was its second best sales year ever, with global sales of 9.37 million vehicles. The automaker had record years in many emerging markets — led by China, Russia and Brazil — while it lost sales and market share in the United States.

The automaker’s best sales year was 1978, when it set the record for most annual sales by any automaker ever with 9.55 million.

GM expects to start seeing some financial benefit from a new UAW labor contract this year, with the ability to pay any new hires with a lower wage and compensation package. It expects to save billions annually, too, from the establishment of a health-care trust — known as a voluntary employee beneficiary association, or VEBA. The VEBA is expected to take effect in 2010 and would allow GM to transfer the responsibility for $47 billion in hourly retiree health-care liability to the trust. GM expects to cut its hourly labor costs nearly in half — to about $5 billion — by 2011, thanks to the new contract.