GM $3b to $6b Away From Collapse; C11 by January. Or Sooner.

Robert Farago
by Robert Farago
gm 3b to 6b away from collapse c11 by january or sooner

I was wondering why this morning’s Automotive News [sub] was revisiting the story on GM’s product development cutback. True: it was THE story of last week. And the new quote from analytical superstar John Casesa is pregnant with foreboding. “It’s really the last resort and underscores how dire the liquidity situation has become.” And now, the money shot: “According to one informed estimate, GM may have about $17 billion in cash left. Since the company needs $11 billion to $14 billion on hand to maintain normal operations, it may face a cash-flow crisis this winter.” MAY? GM’s burning through a billion a month. Without special write-offs or cash calls, The General will run out of liquidity by January. As with Chrysler, even approaching a cash conflagration flame-out puts the ailing American automaker in dire straits. Suppliers, who are busy going to the wall, may demand cash up front, whittling GM’s “pad” down to, well, nothing. If there’s a “run on the bank,” GM’s suppliers could throw GM into C11.

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  • HarveyBirdman HarveyBirdman on Nov 03, 2008

    Sorry, repost. WP is acting funky today.

  • Pch101 Pch101 on Nov 03, 2008

    I'd bet that they'll have major discounts at year end in order to put more cash on the balance sheet. They'd call it a Holiday Sale or something of the sort, but it would really just be an attempt to have more money in the bank and to keep the sales figures high. The rebates should be even bigger than they are now.

  • Brush Brush on Nov 03, 2008

    Just make GM NA a re-engineering outfit. Taking decent cars from the GM operations from around the world, adapting them to the unique qualities that the american public requires so that they will buy them. Then you won't have the need for CEO's CFO's etc... just a plant manager and a decent engineering staff. Was that last sentence an oxymoron?

  • Runfromcheney Runfromcheney on Nov 03, 2008

    I can not believe for the life of me that the once mighty General Motors has been reduced to this: Just a tiny amount cash keeping the company from completely imploding. It is like what Tori Amos once said, "Know the honey from the killer bees." GM and Wrong-Way Rick thought the SUV market was an endless stream of honey. It quickly turned into a swarm of killer bees that stung The General to death.