CHICAGO (AFP) -- General Motors Corp. will record a 39 billion dollar non-cash charge that will cause a massive loss in the third quarter of 2007, the automaker said Tuesday.

The charge is a being recorded as a result of a change in GM's expected future tax costs and will not impact its cash flow as it undergoes a sweeping restructuring program, GM said in a statement.
GM accumulated billions of dollars in potential tax credits in the U.S., Canada and Germany as it recorded historic losses amid a sharp drop in market share.
Those credits need to be reviewed regularly and the automaker decided it could no longer count on earning enough money to use the credits before they expire.
The decision to write-down the tax assets was a result of losses incurred by the mortgage business of GM's financial services unit and ""the company's three-year historical cumulative loss in the U.S., Canada and Germany on an adjusted basis,"" GM said without elaborating.
""The company faces more challenging near-term automotive market conditions in the U.S. and Germany,"" GM added.
The automaker, which recorded a net profit of 953 million dollars in the first six months of this year after losing more than 12 billion dollars in 2005 and 2006, is set to release its quarterly results early Wednesday.
Prior to this announcement, analysts expected GM to post a loss of 11 cents a share.
GM cautioned that the decision to take the charge ""does not reflect a change in the company's view of its long-term automotive financial outlook.""
""GM continues to believe that its new product introductions, combined with the new GM-UAW (United Auto Workers) labor agreement, once fully implemented, will significantly improve GM's competitive position in the United States,"" said Fritz Henderson, GM vice chairman and chief financial officer.
It would also ""better position the company to utilize tax benefits in the United States and Canada in the future,"" he added.
Should results improve, GM could end up using the tax credits which it has taken off its books for accounting purposes.
GM's shares have been on the rise as many analysts saw good results from its restructuring program and following a historic deal with its main union last month which will radically reduce GM's labor costs over the next four years.
GM's hourly labor costs are expected to drop to 25.65 dollars per hour from the current rate of 78.12 dollars by the end of the contract.
The pact introduces a two-tiered wage system and also allows GM to transfer the administration of retiree health care benefits, a ballooning liability estimated at more than 50 billion dollars, at a cost of between 35.3 and 36.9 billion dollars.