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GM to cut 2009 marketing spend

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GM to cut 2009 marketing spend

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In a 40-page document of financial results released today, General Motors Corporation has disclosed that it will slash marketing in the US by $800 million this year alone, including vehicle incentives.

A report from AdAge.com says that in a December 2008 filing, GM had said it would cut advertising and marketing spending in the US by $600 million by 2012. In document released today, the automaker says the cuts were necessary due to lower sales volumes.

Ray Young, GM’s chief financial officer, says that the automaker had to use a lot of incentives in the fourth quarter to offset the lack of credit from GMAC, but still eliminated leasing in Canada last year and is reducing leasing in the U.S.

“That’s an expensive form of incentive,” explains Young.

GM reported a global net loss of $30.9 billion for 2008, including a net loss of $9.6 billion in the fourth quarter.

All four of GM’s regions around the world moved into the red, but the biggest losses were in the US.

GM’s debt balance grew to $45.3 billion in the fourth quarter, which includes the $13.4 billion the company has already received in federal loans since late last year.

It asked the US government for $16.6 billion more in February, saying it needed another $4.6 billion within weeks and an additional $12 billion more to avoid bankruptcy.

GM has also reported that its net liquidity slid from $27.3 billion in the fourth quarter of 2007 to $14 billion at the end of December 2008.

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