Breaking News: GM posts $4.2Billion loss and warns that it is almost out of money
11-07-08, 08:40 AM
#1
Breaking News: GM posts $4.2Billion loss and warns that it is almost out of money
GM: Almost out of cash
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. To top of page
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. To top of page
Last edited by MPLexus301; 11-07-08 at 08:49 AM.
11-07-08, 09:01 AM
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Just wait
IS anyone aware there is still $2 TRILLION in ajustable and sub-prime mortages yet to adjust.... discressionary income is a LONG way from returning to the US economy, people will HAVE to hold on to their cars, or else how is some one who files banruptcy supposed to get to work? And unemployment was 6.5%, NOT 6.2% as predicted.....
Hope that made sense, we are a LONG way from recovery... we'll be lucky it only turns out to be a recession, not depression..
On a positive note tho... HAPPY FRIDAY!!!
Hope that made sense, we are a LONG way from recovery... we'll be lucky it only turns out to be a recession, not depression..
On a positive note tho... HAPPY FRIDAY!!!
11-07-08, 09:12 AM
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GM reports $2.5B 3Q loss, says it's running out of cash!
I smell another bailout coming... 
DETROIT, Mich. – General Motors Corp. says it lost $2.5 billion in the third quarter and warned that it could run out of cash in 2009.
GM also said it has suspended talks to acquire Chrysler. While it didn't specifically name the automaker, GM said it was setting aside considerations for a "strategic acquisition."
The automaker also said its cash burn for the quarter accelerated to $6.9 billion due to a severe U.S. auto sales slump.
The company on Friday reported a net loss of $4.45 per share during the quarter, compared with a record-setting loss of $39 billion, or $68.85 per share, a year ago.
Revenue fell to $37.9 billion from $43.7 billion, due largely to credit freezing across the globe.
The loss exceeded Wall Street estimates. Analysts surveyed by Thomson Reuters predicted a loss of $3.70 per share on sales of $39.4 billion.
The struggling company announced it would improve liquidity by $5 billion by the end of next year by cutting capital spending, reducing sales promotions, and further cutting production in the first quarter. It also suspended the company match for its stock savings (401k) plan in the U.S.
"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business," the company said in a news release.
"Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve" or it receives government funding, the news release said.
GM shares fell 53 cents, or 11 percent, to $4.27 in morning trading.
GM also said it has suspended talks to acquire Chrysler. While it didn't specifically name the automaker, GM said it was setting aside considerations for a "strategic acquisition."
The automaker also said its cash burn for the quarter accelerated to $6.9 billion due to a severe U.S. auto sales slump.
The company on Friday reported a net loss of $4.45 per share during the quarter, compared with a record-setting loss of $39 billion, or $68.85 per share, a year ago.
Revenue fell to $37.9 billion from $43.7 billion, due largely to credit freezing across the globe.
The loss exceeded Wall Street estimates. Analysts surveyed by Thomson Reuters predicted a loss of $3.70 per share on sales of $39.4 billion.
The struggling company announced it would improve liquidity by $5 billion by the end of next year by cutting capital spending, reducing sales promotions, and further cutting production in the first quarter. It also suspended the company match for its stock savings (401k) plan in the U.S.
"Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business," the company said in a news release.
"Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve" or it receives government funding, the news release said.
GM shares fell 53 cents, or 11 percent, to $4.27 in morning trading.
11-07-08, 10:13 AM
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I wish we could finally stop this maddness.
The argument for bailing them out goes like this: If we don't bail them out, 2 million people lose their jobs. That in turn kills the economy. Since there are pensions involved, the government has to step in anyway and the taxpayers have to pay. So no matter what we want or do, the tax payers are ultimatley going to have to pay billions upon billions of dollars to the UAW anyway, and supposedly it will be cheaper to keep propping them up then letting them die.
You have no idea how mad I am at the "Detroit 3" their cars are junk and they've saddled us with tons of debt if we buy their junk or not. I wish all these people could just find jobs at the US Toyota or US Honda plants.
In a way, since many "US" cars are made in Mexico, we are actually bailing out Mexican workers too!
I'll never support the US auto makers, they are a drain on society at this point.
The argument for bailing them out goes like this: If we don't bail them out, 2 million people lose their jobs. That in turn kills the economy. Since there are pensions involved, the government has to step in anyway and the taxpayers have to pay. So no matter what we want or do, the tax payers are ultimatley going to have to pay billions upon billions of dollars to the UAW anyway, and supposedly it will be cheaper to keep propping them up then letting them die.
You have no idea how mad I am at the "Detroit 3" their cars are junk and they've saddled us with tons of debt if we buy their junk or not. I wish all these people could just find jobs at the US Toyota or US Honda plants.
In a way, since many "US" cars are made in Mexico, we are actually bailing out Mexican workers too!
I'll never support the US auto makers, they are a drain on society at this point.
11-07-08, 10:22 AM
#13
I wish we could finally stop this maddness.
The argument for bailing them out goes like this: If we don't bail them out, 2 million people lose their jobs. That in turn kills the economy. Since there are pensions involved, the government has to step in anyway and the taxpayers have to pay. So no matter what we want or do, the tax payers are ultimatley going to have to pay billions upon billions of dollars to the UAW anyway, and supposedly it will be cheaper to keep propping them up then letting them die.
You have no idea how mad I am at the "Detroit 3" their cars are junk and they've saddled us with tons of debt if we buy their junk or not. I wish all these people could just find jobs at the US Toyota or US Honda plants.
In a way, since many "US" cars are made in Mexico, we are actually bailing out Mexican workers too!
I'll never support the US auto makers, they are a drain on society at this point.
The argument for bailing them out goes like this: If we don't bail them out, 2 million people lose their jobs. That in turn kills the economy. Since there are pensions involved, the government has to step in anyway and the taxpayers have to pay. So no matter what we want or do, the tax payers are ultimatley going to have to pay billions upon billions of dollars to the UAW anyway, and supposedly it will be cheaper to keep propping them up then letting them die.
You have no idea how mad I am at the "Detroit 3" their cars are junk and they've saddled us with tons of debt if we buy their junk or not. I wish all these people could just find jobs at the US Toyota or US Honda plants.
In a way, since many "US" cars are made in Mexico, we are actually bailing out Mexican workers too!
I'll never support the US auto makers, they are a drain on society at this point.
11-07-08, 10:29 AM
#14
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I didn't see anyone cheering when Nissan almost went bankrupt. They got bought out, a Japanese powerhouse, by a French company, REnault.
People celebrate Nissan like its the 2nd coming. I didn't see these people raining down on Nissan when they were totally in the red.
In comparison the amount of people enjoying seeing American companies fail is pathetic.
Lets not forget Mercedes dicked over Chrysler.
People celebrate Nissan like its the 2nd coming. I didn't see these people raining down on Nissan when they were totally in the red.
In comparison the amount of people enjoying seeing American companies fail is pathetic.
Lets not forget Mercedes dicked over Chrysler.
11-07-08, 10:30 AM
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I wish we could finally stop this maddness.
The argument for bailing them out goes like this: If we don't bail them out, 2 million people lose their jobs. That in turn kills the economy. Since there are pensions involved, the government has to step in anyway and the taxpayers have to pay. So no matter what we want or do, the tax payers are ultimatley going to have to pay billions upon billions of dollars to the UAW anyway, and supposedly it will be cheaper to keep propping them up then letting them die.
You have no idea how mad I am at the "Detroit 3" their cars are junk and they've saddled us with tons of debt if we buy their junk or not. I wish all these people could just find jobs at the US Toyota or US Honda plants.
In a way, since many "US" cars are made in Mexico, we are actually bailing out Mexican workers too!
I'll never support the US auto makers, they are a drain on society at this point.
The argument for bailing them out goes like this: If we don't bail them out, 2 million people lose their jobs. That in turn kills the economy. Since there are pensions involved, the government has to step in anyway and the taxpayers have to pay. So no matter what we want or do, the tax payers are ultimatley going to have to pay billions upon billions of dollars to the UAW anyway, and supposedly it will be cheaper to keep propping them up then letting them die.
You have no idea how mad I am at the "Detroit 3" their cars are junk and they've saddled us with tons of debt if we buy their junk or not. I wish all these people could just find jobs at the US Toyota or US Honda plants.
In a way, since many "US" cars are made in Mexico, we are actually bailing out Mexican workers too!
I'll never support the US auto makers, they are a drain on society at this point.