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

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.”

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  • 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.

  • DenverMike When was it ever a mystery? The Fairmont maybe, but only the 4-door "Futura" trim, that was distinctively upscale. The Citation and Volare didn't have competing trims, nor was there a base stripper Maxima at the time, if ever, crank windows, vinyl seats, 2-doors, etc. So it wasn't a "massacre", not even in spirit, just different market segments. It could be that the Maxima was intended to compete with those, but everything coming from Japan at the time had to take it up a notch, if not two.Thanks to the Japanese "voluntary" trade restriction, everything had extra options, if not hard loaded. The restriction limited how many vehicles were shipped, not what they retailed at. So Japanese automakers naturally raised the "price" (or stakes) without raising MSRP. What the dealers charged (gouged) was a different story.Realistically, the Maxima was going up against entry luxury sedans (except Cimarron lol), especially Euro/German, same as the Cressida. It definitely worked in Japanese automaker's favor, not to mention inspiring Lexus, Acura and Infiniti.
  • Ronnie Schreiber Hydrocarbon based fuels have become unreliable? More expensive at the moment but I haven't seen any lines gathering around gas stations lately, have you? I'm old enough to remember actual gasoline shortages in 1973 and 1979 (of course, since then there have been many recoverable oil deposits discovered around the world plus the introduction of fracking). Consumers Power is still supplying me with natural gas. I recently went camping and had no problem buying propane.Texas had grid problems last winter because they replaced fossil fueled power plants with wind and solar, which didn't work in the cold weather. That's the definition of unreliable.I'm an "all of the above" guy when it comes to energy: fossil fuels, hydro, wind (where it makes sense), nuclear (including funding for fusion research), and possibly solar.Environmental activists, it seems to me, have no interest in energy diversity. Based on what's happened in Sri Lanka and the push against agriculture in Europe and Canada, I think it's safe to say that some folks want most of us to live like medieval peasants to save the planet for their own private jets.
  • Car65688392 thankyou for the information
  • Car65688392 Thankyou for your valuable information
  • MaintenanceCosts There's no mystery anymore about how the Japanese took over the prestige spot in the US mass market (especially on the west coast) when you realize that this thing was up against the likes of the Fairmont, Citation, and Volaré. A massacre.
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