Aug. 1 (Bloomberg) -- General Motors Corp. reported a quarterly loss of $15.5 billion, the third biggest in its 100- year history, because of plunging U.S. sales and the declining value of truck leases.

The deficit of $27.33 a share compares with a profit of $891 million, or $1.56, a year earlier. Excluding costs GM considers one-time, the per-share loss was 4 times bigger than analysts projected. Labor strikes contributed to a $9.9 billion drop in North American revenue, and sales worldwide tumbled 18 percent to $38.2 billion. The shares fell 7.6 percent.

Chief Executive Officer Rick Wagoner, 55, has cut manufacturing costs by $9 billion and plans to boost liquidity by as much as $17 billion to remain solvent. The world's largest automaker has posted $69.8 billion in losses since 2004 and said today it must have $11 billion to $14 billion each month to pay its bills.

``They really need those external fund-raising measures to get through to 2010,'' said Brian Johnson, a Chicago-based Lehman Brothers analyst, in a Bloomberg Television interview. ``We cannot count on an economic rebound.''

Its fourth straight quarterly loss comes as a weakened U.S. economy drags U.S. auto sales to 15-year lows.

July Sales Plummet

Demand for GM products dropped 16 percent through June and 27 percent last month while record gasoline prices sapped demand for pickups and sport-utility vehicles. Purchases of the automaker's Chevrolet Avalanche pickup and GMC Yukon SUV are down at least 32 percent.

``There is a tendency to throw up your hands and say this can't be fixed,'' Wagoner, in his ninth year as CEO, told Bloomberg Television today. ``We do have adequate liquidity through 2009 even with continuing difficult market conditions and, to be honest, we don't know when that's going to turn.''

GM burned through $3.6 billion in the quarter and said today its supply of cash, marketable securities and other funds available fell to $21 billion on June 30 from $23.9 billion at the end of the first quarter, and $23.6 billion a year earlier.

The soft U.S. market is buffeting automakers worldwide. Ford Motor Co. posted a record quarterly loss of $8.7 billion. Nissan Motor Co. reported a 43 percent decline in profit today, while Bayerische Motoren Werke AG said earnings slid by a third.

`Spectacular Loss'

``This is a spectacular loss,'' said Sean McAlinden, an economist at the Center for Automotive Research in Ann Arbor, Michigan. He said a Wagoner revival strategy that has improved earnings overseas, generated money-saving labor accords and boosted vehicle quality is now clouded by record fuel prices.

``They had small-car conversion plans under way for 2010 or 2011, but things happened too fast,'' McAlinden said.

GM fell 84 cents to $10.23 at 4 p.m. in New York Stock Exchange composite trading. The shares have plunged 59 percent this year, for the worst decline among the 30 companies in the Dow Jones Industrial Average.

``There was not a lot to be encouraged about today,'' said Dan Poole, vice president for equity research at Cleveland-based National City Corp. ``You have to be a deep contrarian investor'' to buy GM shares.

The Detroit-based automaker reported a $2 billion expense in the quarter because of the decline in residual values for leased vehicles.

Worse Than Estimates

Excluding expenses considered by GM to be one-time, such as a worker-buyout program and an adjustment to reserves for bankrupt former parts subsidiary Delphi Corp., the loss was $6.3 billion, or $11.21 a share. On that basis, the company was forecast to lose $2.40 a share, the average of 12 analysts surveyed by Bloomberg.

GM said a three-month walkout at another former unit, American Axle & Manufacturing Holding Inc., resulted in an expense of about $1.8 billion for lost production and sales. The automaker also paid about $200 million to help settle that dispute, which dried up supplies of truck axles and forced GM to idle more than 30 plants.

The company was profitable in both its European and Latin America-Africa-Middle East regions, posting a combined $465 million gain. GM's loss grew to $9.3 billion in North America, from a deficit of $88 million. In its Asia-Pacific region, GM lost $163 million after a profit of $280 million a year earlier.

GMAC

About $1.2 billion of GM's loss was related to the partly owned GMAC finance unit.

GMAC yesterday reported a $716 million pretax expense for residual-value losses as part of a $2.5 billion second-quarter net loss. It was able to reduce that cost because of $1.55 billion the finance and mortgage company expects to receive from GM through risk-sharing and other agreements and $350 million in payments already made.

GMAC said it has $30 billion in North American leases. That includes $12 billion in SUVs and $6 billion in other trucks, vehicle types that are losing sales because of $4-a-gallon gasoline.

The residual value is a vehicle's worth when a customer returns it at the end of a lease. The lender's residual losses average $11,000 a vehicle for GM models, GMAC said yesterday.

Leasing helps reduce monthly payments. A well-appointed 2008 Chevrolet Tahoe, for instance, would cost about $610 a month on a three-year lease compared with $795 per month if purchased with a typical five-year loan, said Bruce Litvin, sales manager at Joe Lunghamer Chevrolet in Waterford, Michigan.

The cost of protecting GM debt from default rose. Credit- default swaps on GM rose 409 basis points to 2430 basis points, according to CMA Datavision in London.

Swaps

Credit-default swaps are designed to protect bondholders against default. A rise indicates deterioration in the perception of credit quality; a decline suggests the opposite.

GM's 8.375 percent bond due July 2033 fell 1.5 cents on the dollar to 47.5 cents on the dollar, according to Trace, the bond- price reporting system of the Financial Industry Regulary Authority. The yield rose to 17.9 percent.

Standard & Poor's yesterday cut GM's credit rating to B-, or six levels below investment grade, because falling U.S. sales are causing the automaker to use more cash than anticipated. With the U.S. auto slump expected to carry into next year, GM faces a risk of further cuts, said Robert Schulz, an S&P debt analyst. GM had the highest rating, AAA, from 1953 until 1981.

Largest Losses

GM in 2007 reported its largest annual loss, $38.7 billion, after a tax-accounting change. The biggest quarterly loss, $39 billion in last year's third quarter, topped a $21 billion deficit for a quarterly accounting change in 1992.

The automaker's losses over the past four quarters rank as the second-highest on record. Combined with losses in the three previous quarters, GM's deficit in the last year totals $58.4 billion, behind only AOL Time Warner's 2002 annual loss of $99.1 billion, according to Bloomberg data since 1990.

GM last month outlined plans to increase liquidity, including cutting an unspecified number of salaried jobs and eliminating the 25-cent-a-share dividend to help save $10 billion annually. GM plans to generate $4 billion to $7 billion by selling assets and borrowing from banks and will trim salary payroll costs 20 percent and delay some products.

The increased cash means the automaker will have enough to operate should U.S. sales fall to 14 million cars and trucks this year and next, lower than analysts expect, Wagoner told employees last month.

July auto sales released today tumbled to a seasonally adjusted annual selling rate of 12.5 million vehicles, the lowest since March 1993, according to preliminary Bloomberg data.

``You can kind of look at July as a preview for the rest of the year,'' S&P's Schulz said. ``We just expect sales to be weak.''

To contact the reporter on this story: Greg Bensinger in Detroit at gbensinger1@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net.

Last Updated: August 1, 2008 16:20 EDT