DETROIT (AP) – General Motors Corp. posted its largest annual loss in more than a decade, laying bare the problems the automaker is facing: rising labor costs, fierce competition from Asia and falling sales at home. It was another blow for the U.S. auto industry, already reeling from massive job cuts announced this week by Ford Motor Co.

GM, which could lose its position as the world’s largest automaker this year to Toyota Motor Corp., said Thursday it lost $4.8 billion in the fourth quarter and $8.6 billion for all of 2005. That was the worst showing since 1992, when it lost $23.5 billion.

Sales gains in Asia, Europe and elsewhere were more than offset by huge losses in North America, where GM lost $5.6 billion for the year.

Company executives insist the results will improve in 2006, but GM shares slumped as concerned investors wondered if the company can win customers and extract sufficiently large concessions from its unions to stop the financial nosedive.

“It was surprisingly negative, well below the low end of the most pessimistic analysts, which is no small feat,” said Pete Hastings, vice president of corporate fixed income at the investment firm Morgan Keegan & Co. “I think you’ll see recovery off of 2005. But getting back to profitability in North American operations is a multiyear challenge.”

The company lost $15.13 per share for the year, far more than Wall Street’s forecast of a loss of $4.19 per share, according to analysts surveyed by Thomson Financial. Worldwide revenue of $192.6 billion for the full year was down slightly from 2004.

GM shares, already down 36 percent since July, fell 80 cents, or 3.4 percent, to close at $23.05 Thursday on the New York Stock Exchange. Moody’s Investors Service said it was reviewing GM’s credit rating, already in “junk” territory, and could downgrade it further.

“Two significant fundamental weaknesses in our North American operations were fully exposed – our huge legacy cost burden and our inability to adjust structural costs in line with falling revenue,” said GM Chairman and CEO Rick Wagoner. He described 2005 as “one of the most difficult years in GM’s history.”

GM shares enjoyed a brief runup late on Wednesday after billionaire investor Kirk Kerkorian disclosed that he had reacquired 12 million shares of GM stock he sold in December. Analysts said the move suggested he had confidence in the company’s recovery efforts, but Merrill Lynch analyst John Murphy told investors that while Kerkorian’s presence will ratchet up pressure on GM’s management, “we believe things will get worse before they get better.”

A spokeswoman for Tracinda Corp., Kerkorian’s private equity firm, wouldn’t comment Thursday on GM’s stock slide.

Wagoner and other executives said they will move forward with GM’s turnaround plan, which calls for eliminating 30,000 jobs and closing 12 facilities by 2008. GM anticipates stronger sales this year because of its new lineup of sport utility vehicles and trucks, and it’s abandoning costly, confusing incentives in favor of lower prices on most vehicles.

But some analysts doubt GM’s new lineup of trucks and SUVs will do well, particularly if gas prices rise. Shelly Lombard, a senior analyst at the corporate bond research firm Gimme Credit, pointed out that SUV sales fell 42 percent in the fourth quarter.

GM also forecast that it will save $4 billion in structural costs this year, primarily because of a health care deal with the United Auto Workers. “We do expect improved financial results in 2006 and 2007,” GM Chief Financial Officer Frederick “Fritz” Henderson said. “There’s really no other choice.”

But Henderson acknowledged that GM expects to pay between $3.6 billion and $12 billion to settle retiree obligations at Delphi Corp., its former parts division that filed for bankruptcy last year. GM took a pretax charge of $3.6 billion in 2005, indicating a deal between Delphi, GM and the UAW could be near.

GM’s own turnaround also will take a heavy financial toll. GM spent $1.3 billion on restructuring in 2005, most of which went to employees laid off after plant closures. Under GM’s current contract with the UAW, laid-off hourly workers will continue to receive most of their pay and benefits through 2007, when the contract expires.

Henderson wouldn’t say how many workers will get those benefits. GM said it’s talking to the UAW about an attrition program that could reduce the total. GM also could try to eliminate that perk when it negotiates a new contract with the UAW, but UAW President Ron Gettelfinger said this month that the union will fight to keep it.

UAW spokesman Paul Krell said Thursday that the union had no comment on GM’s results.

GM sold 9.2 million vehicles worldwide in 2005, the second-largest volume in the company’s history. By contrast, Toyota produced 7.4 million vehicles in 2005 and plans to make 9.06 million this year.

GM set sales records in Asia, Latin America, Africa and the Middle East, and Chevrolet snatched the crown for America’s best-selling brand from Ford. But North American losses overwhelmed those gains, and GM’s worldwide market share was down slightly, to 14.2 percent from 14.4 percent in 2004.

GM’s financial arm, General Motors Acceptance Corp., earned $2.8 billion in 2005, down 3 percent from record earnings of $2.9 billion in 2004.

Wagoner said GMAC’s 2005 results were solid considering its debt was lowered to “junk” status in the spring, making it harder for the division to borrow money. GM is considering the sale of a controlling interest in GMAC this year, but gave no update on the progress of those talks. A sale would shore up the division’s credit rating but hurt GM’s profits. The automaker collected a dividend of $2.5 billion from GMAC in 2005.

GM’s results come three days after Ford announced a profit of $2 billion for 2005. But Ford also struggled in its home market, losing $1.6 billion in North America, and announced a plan to cut 30,000 jobs and close 14 facilities by 2012.

GM and Ford could see little help from Washington. President Bush, in an interview with The Wall Street Journal published Thursday, said he hadn’t been approached about a bailout for GM or Ford Motor Co. but might not support one if he was.

“I think it’s very important for the market to function,” Bush said. He said companies need to manufacture “a product that’s relevant” and that his administration has discussed new fuel technologies with the nation’s top two automakers.

Michigan’s Democratic senators shot back Thursday, saying automakers want fair trade policies, not a bailout. Sens. Carl Levin and Debbie Stabenow said foreign competitors don’t face the same high pension and health care costs and are protected by trade barriers and currency manipulation.

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