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article imageGM posts quarterly loss of $6 billion

By Bob Ewing     May 7, 2009 in Business
GM is going through its cash reserves faster than ever as it moves toward a June 1 deadline to cut debt and expenses or else file for bankruptcy.
GM lost $6 billion in the first quarter and the company's sales around the world fell 40 percent. Making matters worse revenue was cut nearly in half.
What causes the greatest concern is the $10.2 billion in cash that G.M. depleted in three months, the equivalent of $113 million a day. That is nearly twice the company’s rate of cash burn in the fourth quarter.
GM, as of March 31, had $11.6 billion on hand, which is roughly the minimum level of liquidity that G.M. has said it needs to keep operating; since then, the government has loaned G.M. an additional $2 billion.
“Our first-quarter results underscore the importance of executing G.M.’s revised viability plan, which goes further and faster to lower our break-even point,” G.M.’s chief executive, Fritz Henderson.
This is the company's eighth quarterly loss in a row. In 2008, GM's loss figure was 3.3 billion dollars. Some analysts expected that the news would be worse this year.
Chief Financial Officer Ray Young said, "We cannot cut costs fast enough to offset that revenue loss.People are concerned about bankruptcy, and that's the reason why we want to avoid it if at all possible."
More about General motors, Quarterly loss, Billion
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