General Motors recorded the second-worst loss in corporate history last year after tax revaluations pushed the figure to $38.7billion (£19.7billion), the American carmaker revealed yesterday.

It also announced plans to offer severance payments to 74,000 workers in the United States, which could cost it more than $4 billion. Production staff would receive packages worth £45,000 and white-collar employees £62,500 if they choose voluntary redundancy or early retirement.

GM revalued tax benefits, which would have applied had it been profitable, after it turned in losses for three consecutive years. Without the impact of the revaluation, GM lost $23 million last year, compared with a profit of $2.2billion in 2006.

Much of the fall in operating profits was down to GM's 49 per cent stake in GMAC, the financial services business. GMAC, now majority-owned by Cerberus, the private equity group, lost $2.3 billion last year, mostly from the impact of the weak American housing market on its mortgage business.

Rick Wagoner, GM's chief executive, said: “We're pleased with the positive improvement trend in our automotive results ... but we have more work to do to achieve acceptable profitability and positive cash flow.”

AOL TimeWarner had the biggest loss, a $99 billion deficit five years ago.

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