GM’s Pared Loss Reflects Tough Problems : Autos: The No. 1 car maker lags its rivals in third-quarter results. New labor contract presents big expenses.

DETROIT — General Motors Corp. reported a third-quarter loss of $113 million Thursday, showing improvement from a year ago but also reflecting persistent problems.

While the company narrowed its automotive losses in the United States, Canada and Mexico, it still lost $1.1 billion in North America during the quarter. Since 1990, GM, the No. 1 U.S. auto maker, has lost $18 billion in the three countries.

“We’ve accomplished a lot, but we still have a long way to go,” said John F. Smith, GM’s chief executive. “We won’t be satisfied until we’ve restored the earnings power of our operations in the key North American market.”

The third-quarter loss translates to 49 cents a share. In the comparable period last year, GM lost $1.12 billion, or $1.86 cents a share. Sales improved slightly, to $30.18 billion from $29.48 billion.

The results were in line with Wall Street’s expectations, and investors looked positively on the progress GM is making with its restructuring. The stock closed $2.125 higher at $49 a share on the New York Stock Exchange.

“It is a huge improvement over last year,” said S. G. Warburg analyst David Healy.

Still, GM’s loss in what is usually a weak quarter for the auto industry stood in contrast to strong earnings posted by its Detroit rivals. Ford Motor Co. earned $463 million and Chrysler Corp. earned $423 million; both benefited from rising sales.

GM’s results reflected a $589-million charge for job security payments to laid-off workers and a $144-million expense for future payments to retirees. Both expenses are tied to the tentative contract agreement with the United Auto Workers union reached Sunday.

The charges were offset partially by a onetime income tax credit of $444 million.

G. Richard Wagoner, GM’s chief financial officer, said the company pushed hard in the contract talks, but, as analysts have noted, did not achieve its goals. “I don’t want to leave the impression that the contract was a good deal for us,” Wagoner said. “It wasn’t.”

Still, he said, relations between GM and the UAW have improved.

The new labor contract raises GM’s pension and job security obligations. For instance, it provides for a 13% increase in monthly pension payments by 1996.

Wagoner said GM’s unfunded pension obligation will reach $24 billion by year’s end, up from $14 billion last year. Most of that is due to lower interest rates, which reduce the fund’s returns on investments.

The company put $4 billion into the fund this year and hopes to eliminate the liability by 1999.

Wagoner said the pension fund payments should not disrupt product development plans. “We can handle this,” he said, though he acknowledged that an economic slump would make it difficult.

The new contract also requires GM to set aside $4 billion in a job security fund so it can provide nearly full pay to furloughed workers. GM may eliminate as many as 65,000 hourly-wage jobs in the next few years.

Meanwhile, GM’s share of the U.S. car and truck market continues to fall. It stood at 31.2% in the third quarter, down from 33.5% a year earlier. The company attributed the decline to production shortfalls and a planned reduction in rental fleet sales.

Wagoner said GM’s goal of showing a profit for the year in North America--before taxes, interest and special charges--is still attainable. He would not speculate as to when the company will again report a profit from its North American operations.