No. 1 automaker posts huge loss - says it has made case to Washington for rescue. By Chris Isidore, CNNMoney.com senior writer November 7, 2008: 11:39 AM ET NEW YORK (CNNMoney.com) -- General Motors shook an already embattled auto industry Friday as it reported a huge loss that was much worse than expected and warned it is in danger of running out of cash in the coming months. GM, the nation's largest automaker, reported it lost $4.2 billion, or $7.35 a share, excluding special items. That's up from the loss $1.6 billion or $2.86 a share it reported a year earlier and was far worse than the forecast of analysts surveyed by earnings tracker Thomson Reuters, which had forecast a loss of $3.70 a share. But the most shocking news came in its statements about its cash position. GM said it had burned through $6.9 billion during the quarter and warned that it "will approach the minimum amount necessary to operate its business" during the current quarter. In addition, the company said that that in the first half of next year its "estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve." The report was by far the most grim assessment by a company that has insisted it is not considering filing for bankruptcy court protection. While the release did not mention the threat of bankruptcy, the outlook appeared to raise the possibility of such a dramatic step. The company announced a series of additional job cuts and spending cuts designed to help it improve its cash reserves by $5 billion. But it warned even those steps would not be enough without a turnaround. GM said that it may need help from the federal government. "The company has engaged in discussions with various U.S. federal government agencies and congressional leaders about the ... the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers," according to a company announcement. Shares of GM (GM, Fortune 500), whose trading was halted ahead of the announcement, fell 16% after they resumed.
They just need to hold on till the Camaro comes out, it's not gonna save them but it is gonna help them a lot.
I have mixed feelings, but one things sure this country cant take the huge job losses. I'll be happy as long as Chrysler remains.
I know, I don't think they thought the country would fall into the crappy so fast. Everyone was saying that Chry blew it by rushing the release of the Chally and only having SRT8 versions avail at first. GM was smarter by waiting. Uh, not lookin that way now, lol!
What still worries me is servicing and repairs. A lot of people use the dealer, what is everyone gonna do? You think these dealers will stay open just as repair facilities? There's a million GM and Chry cars out there that are still gonna need servicing.
I saw this coming for years. GM has been bleeding big money for a long time and spending tons of money on new vehicles and advertising at the same time. At some point they have to pay the piper. In a way I feel the U.S. government itself is getting itself into this situation as well by borrowing billions of dollars which it cannot pay back in the future. You can only do so many mega-billion dollar bailouts before our government won't be able to borrow anymore and our currency goes in the crapper (my opinion).
jeff...... strictly from an economic stand point i would agree with you. the govt. can not hold all the liability in the end. the results could be absolutely disastorous for our country. that is not a democratic or republican thing...... strictly economics...... we are in some very scary times right now imo!
