GM sets a company record…and it’s not a good one

Yesterday General Motors' streak of three consecutive profitable quarters was brought to an abrupt and ugly end when the country's largest automaker announced it had posted an astonishing $39 billion loss in the third quarter. The automaker said the loss, which is also one of the largest quarterly corporate deficits ever posted, was due to a charge involving unused tax credits. The largest charges and losses in corporate history was posted by Time Warner, then known as AOL Time Warner, which lost $98.7 billion in 2002.

GM also took a $1.6 billion operating loss in the third quarter.

The AP is reporting that GM said the third-quarter loss is more specifically attributable to "a $38.6 billion noncash charge largely related to establishing a valuation allowance against accumulated deferred tax credits in the U.S., Canada and Germany, as well as mortgage losses at GM's former financial arm, GMAC Financial Services."

Rick Wagoner, GM's chairman and chief executive knew the charge would be hard for many to comprehend and doesn't want people overreacting to the dollar figure.

"I think you'd have to have a Ph.D. in accounting to understand it," Wagoner said during an interview on "The Paul W. Smith Show" on WJR-AM. "It doesn't have any impact at all. I would encourage people not to overreact in a negative way to it."

This comes on the heels of GM's announcement last week that October was the third consecutive month it saw an increase in sales.