GM To Curtail New Product Plans– And Run Out of Money in 2010
OK, the credit analyst presenting the timeline works for gimmecredit.com. Take that as you will. But Shelly Lombard has done the math (for BusinessWeek): “GM had $21 billion in cash at the end of June. The company has a further $5 billion in available credit and cash and plans to save $10 billion from cost cuts. Assuming GM can also tap $5 billion to $7 billion in federal loans that the federal government has approved, GM has up to $21 billion in excess liquidity on top of the $14 billion it needs to run the company… Given GM’s cash-burn rate of more than $3 billion a quarter, the company has five to seven quarters before it gets down below the bare minimum it needs to buy parts and keep factories humming, Lombard says. GM’s best bet is to tap the government’s loan program and hope the market turns up.” Not to mention hunkering down. Oh wait, that too. “Several sources inside the company say GM is looking at product delays to save cash, hoping the company can weather the weak economy and liquidity crisis and make it through to 2010. All but essential programs are at least getting a review, the sources said. Even the next-generation Chevrolet Malibu could be on the table. GM wants each of its cars to get a makeover every 5½ years, but it may have to stretch that to 7½ years for some models to stay in the black. A GM spokesman says the company is delaying some product programs but that nothing major has been held up yet.” Stay in the black? What black? Anyway, that’s not exactly how I remember it…
Shouldn't this be Death Watch 203?
7.5 years between product updates? That's what VW used to do. As a result, they almost left North America because no one was buying their ancient products. GM is so screwed and so clueless, it's not even close to funny anymore.
I have been saying this for over a month now. They are scrounging for every penny than can get just to last a little longer and it's down to cutting future products(that they so desperately need) to save a few bucks to keep the lights on a little longer. Next they are going to start to shut down production that makes everyone go WTF to save on material costs they can't afford to buy. That will be the sign that death is right around the corner. I'm not talking about SUV's, I mean like the Impala taking a several month break from production, the Camaro getting pushed back 4-6 months, etc. 7.5 years between updates is a joke, they already do that now, and they said they were going to stop that and do more frequent updates. These guys have no recovery plan, they are just reacting and panicing, they are f*cked. Who on earth will be buying such out of date cars, they are barely competative now, what will they look like compared to the Japanese in 6 years. I guess they plan to continue the cash on the hood sales and 50% to fleet sales. Well if they are around long enough to do it, and they wont be, the Volt isn't going to see the light of day. I hope the EPA stalls so they don't get the money, it will just be flushed down the GM toilet right before they flush themselves.