GM Cash Conflagration Threatens the Big B

gm cash conflagration threatens the big b

In my imagination, GM execs start every major meeting cranking-up the Talking Heads' "Burning down the House" and dancing in that awkward style peculiar to drunk 50-somethings at the latter part of their daughter's wedding. In real life, they probably exchange worried glances over highly polished tables every now and then and continue their "work" with grim, monotone determination. Well here's an arched eyebrow for you guys: The Wall Street Journal reports that GM CFO Ray Young is "open to raising additional financing to weather the auto industry's current downturn and other challenges facing the company" at the same time that he "remains confident in its liquidity for 2008." I love a mixed message in morning. Smells like… bankruptcy. "If the current adverse economic conditions persist or deteriorate further we would consider a wide range of actions," Mr. Young said. On Ray's To-Do list: "opportunistically" tapping credit markets, including funding sources in the U.S., selling "noncore" assets and/or "reprioritizing" its capital spending. Question: what credit markets? GM credit ratings sucks. Cerberus' struggles with Chrysler have polluted the private equity pond and GM's already spending $2b on interest payments. What non-core assets? GM's already sold off everything it's got of any real value. And what do you mean by "reprioritizing" cap ex? Cutting back on product development? And I wonder why this article neglected to mention the newly released information that GM's cash burn for the year is estimated at $8b– and counting. $24b (claimed liquidity) – $10b (float) – $8b (current cash burn) – ? = C11. [thanks to jthorner for the tip]

Comments
Join the conversation
2 of 6 comments
  • Jthorner Jthorner on May 14, 2008

    This is the same CFO who just burned nearly a billion dollars in precious cash to buy out the lease on HQ and pick up some office space in Pontiac, Michigan. Un_______ believable.

  • HEATHROI HEATHROI on May 14, 2008

    They won't be bailed out - with the nation running an overdraft of about 300 billion dollars and a public debt with huge exhaust plume of zeros any spare change in the treasury will be vacuumed up by the banks and other 'special interest' groups and 'stakeholders". There will be some window dressing but nothing more than that.

  • SCE to AUX Why can't the NHTSA find or keep its leaders?
  • Faith Shoot my 2015 Ecodiesel with 170k miles just went out. I'm bummed big time
  • Marky S. To: article author: My Pleasure! I just don't want to be seen as a "know-it-all". There is a good detailed article on Wikipedia about the poor Edsel. Many believe that Ford gave up on it too soon, although there are a variety of reasons why Edsel was not popular. It actually sold respectable well, considering that this NEW nameplate was introduced during a Recession.
  • EBFlex "I've only filled the gas tank three times in 2500 miles"Assuming you went from 0 gallons to full (17.2), you have averaged almost 50MPG over those 2500 miles. 50 MPG in a Jeep Wrangler. To all of you EV nut jobs, tell me again how PHEVs are not the absolute best thing to happen to automobiles since the wheel. And tell me how they don't make EVs look like the awful play toys that they are.
  • MRF 95 T-Bird The Buick 215/3.5-liter aluminum V8 was one of GMs great engines. Unfortunately GM being GM in one of their greatest mistakes was selling off the tooling to BL. If they kept it around and improved upon it it would have been a fine motor for their compacts and midsize models through the OPEC oil crisis.
Next