GM Down to Its Last $34b

Robert Farago
by Robert Farago
gm down to its last 34b

In his first conference call with automotive analysts, freshly-minted GM CFO Ray Young said that his employer has $27.3b in cash and $7b in undrawn credit lines upon which to draw. Although that ain't hay, subtract the $10b GM needs to keep the lights on, consider the company's ongoing cash conflagration, factor in declining sales and the American Axle strike's effect on cash flow, remember that GM lost $10.6b in 2005, keep in mind that GM's already sold the family silver and… the automaker's liquidity isn't quite so reassuring. But don't take my word for it. "As CFO, my priority is making sure this place is funded," Young said. "While we believe the industry (in U.S. sales) will be in the low 16 million units, we have triggered actions right now to make sure we start to conserve liquidity." Automotive News [sub] reports that GM's Beancounter-in-Chief revealed that GM is postponing [unspecified] non-product related capital expenditures from the first half of '08 to the latter half of the year– and beyond. "If the market doesn't return, we will defer that further into the future," Young said. GM's CFO said the suits are now running the business on a "quarter-to-quarter" basis. Oh, and Young said that GM ran about 940k units of dealer stock the end of February, roughly 125k units below the level at this point last year.

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4 of 19 comments
  • Yankinwaoz Yankinwaoz on Mar 22, 2008

    Gosh... with their liabilities such as the VEBA and debts that means that GM is worth less than zero.

  • Jkross22 Jkross22 on Mar 23, 2008

    Since so many consumers do research online for cars, how is GM going to convince buyers they're going to be around for longer than the next few years? They don't have an Iaccoca type leader, but maybe begging for a consumer funded bailout would work. If that happens, it will simply make me and others run away from GM even faster.

  • GS650G GS650G on Mar 24, 2008
    gmbuoy Too bad it all does not translate to sales. They still keep score in dollars. The Renault Alliance was a COY too, remember?

  • Ricky Spanish Ricky Spanish on Mar 24, 2008

    low 16s? keep dreaming. the revised estimate is 14.95 million.