Accounting errors in the very finance business that General Motors Corp. is looking to sell will add about $2 billion more onto the $8.6 billion GM had already estimated it lost in 2005.
Analysts have said that much of the new charges GM is taking on are related to its bailout of bankrupt Delphi Corp., GM's former auto parts subsidiary. The biggest reason for the increase in GM's 2005 loss was a $1.3 billion increase in the charge for its exposure relating to Delphi's Chapter 11 bankruptcy case, to $3.6 billion.
In a statement, GM said that the accounting errors relate to transactions at ResCap, a residential mortgage subsidiary of its finance arm, General Motors Acceptance Corp. The company said that the problems could affect earnings from prior years. GM is trying to sell a controlling stake in GMAC.
The company also said that it would delay filing its annual report with the Securities and Exchange Commission for up to two weeks. Barely a week earlier, GM had said that it would file its annual report on time. GM is still working on renegotiating a labor agreement between Delphi and the United Auto Workers union.
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