GM Books $4.2b Net Loss in Q3; Bankrupt By December

Robert Farago
by Robert Farago
gm books 4 2b net loss in q3 bankrupt by december

The Wall Street Journal reports GM’s statement on its dismal Q3 results. The General’s general admits that “estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business.” So, essentially, unless GM gets a federal bailout by 12/31/08, the artist formerly known as the world’s largest automaker will be forced to file Chapter 11. And no wonder, given GM’s cash burn reported [with all the numbers] by Yahoo! Finance. “Cash, marketable securities, and readily-available assets of the Voluntary Employees’ Beneficiary Association (VEBA) trust totaled $16.2 billion on September 30, 2008, down from $21.0 billion on June 30, 2008… The change in liquidity reflects negative adjusted operating cash flow of $6.9 billion in the third quarter 2008.” The entire “money shot” quote after the jump.

“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. 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, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing. The success of GM’s plans necessarily depends on other factors, including global economic conditions and the level of automotive sales, particularly in the United States and Western Europe.”

Join the conversation
2 of 79 comments
  • Happy_Endings Happy_Endings on Nov 08, 2008
    Barry, Nancy, and Harry to the rescue. GM's not lasting until January. They'll be gone by Festivus if nothing is done. Which means the Republicans will also have to get involved somehow.
  • Tate Tate on Nov 09, 2008

    It was coming, but its sooner than expected. The US Gov should sell all the brands to large Private Equity Companies (similar to a Chrysler and Cerebus Capital) and provide tax holidays and provide support for new green field production factories (thus helping economy) and in the meantime the brands can share production facilities at the existing factories and keep selling the current cars. This will develop new dealerships and supply chains etc and help boost the economy. Its hard and might sound stupid currently but will make sense in the long term future. For example- Maybe the Pontiac brand will down the years become a specialist high performance name like the Porsche or lotus. While Saab may become a specialty in hybrid technology.

  • Bullnuke It may be awhile before these show up on US shores. The MV Fremantle Highway has just started demo/reconstruction in Rotterdam after the large fire when transporting its last shipment of electric Porsche products.
  • Fie on Fiasler Big, fast and thirsty does not equal good. True luxury is not cobbled together by the UAW.
  • Inside Looking Out I see it as gladiator races - only one survives in virtual world.
  • Crown They need to put the EcoDiesel back in the Grand Cherokee. I have a 2018 and it has been the most reliable vehicle I ever owned. 69,000 miles and only needed tires, and regular oil and fuel filter changes.
  • El scotto Y'all are overthinking this. Find some young hard-charging DA seeking the TV limelight to lock this kid up. Heck, have John Boehner come up from Cincy to help the young DA get his political career going. Better yet, have the young DA spin this as hard as he or she can; I'm the candidate for Law and Order, I defied our go-easy office and leadership to get this identified criminal locked up. Oh this could be spun more than a hyper active kid's top.Now I'd do some consulting work for Little Kings Original Cream Ale and Skyline Chili.