GM burns 13 billion in 3 months

The Colosseum Sports Forum - The Arena of Entertainment - - - Don't feed the posters in Cricket - you'll lose your arm up to the elbow.

Welcome to The Colosseum Sports Forum - Arena of Entertainment

9/10 muppets agree, this is the best online sports forum ever.

A place to talk sport and shit!

Click Here to Join The Colosseum Sports Forum

If you're already a member please log in to your account to access all of our features:

GM burns 13 billion in 3 months; WTF!
Topic Started: May 9 2009, 12:50 AM (45 Views)
galahs	May 9 2009, 12:50 AM Post #1
Four of a Kind Posts: 36,457 Group: Admin Member #2 Joined: 27 September 2005	General Motors burns through $13.4 billion in three months By Kevin Krolicki and David Bailey Reuters May 08, 2009 07:24am GENERAL Motors said it burned through $US10.2 billion ($13.4 billion)in the first quarter as it relied on a federal bailout to ride out a sharp decline in global sales that overwhelmed its cost-cutting efforts. Revenue dropped by almost half to $22.4 billion as the company cut production by about 900,000 vehicles and worked to run down costly inventories in the US and Europe. There is extreme pressure on GM with just four weeks remaining for the embattled automaker to win deals to slash debt and operating costs with its major union and bondholders to avoid bankruptcy. "Results were awful, as expected, however, GM's cash burn was even worse than we were expecting," Kip Penniman of KDP Investment Advisors. GM's Chief Financial Officer Ray Young said there was evidence consumers were scared away from GM cars and trucks because of concern the automaker was headed for bankruptcy. GM cut $US3.1 billion in operating costs in the first quarter, including just over $US1 billion in North America, but that didn't keep pace with the plunge in sales. "You could not offset the revenue implosion that we experienced here," Mr Young said. GM's North American operations, where it plans to cut 21,000 factory jobs and close and close more than 2,600 dealerships, posted a loss before interest cost and taxes of $US2.5 billion. European operations, which Italy's Fiat SpA has proposed taking over, posted a loss on the same basis of $US1.2 billion as vehicle sales in the region dropped 29 percent. GM still hopes to complete a debt restructuring out of court but is readying plans for what it expects would be a quick bankruptcy if that proves necessary, Mr Young said. He said GM expects to draw on the experience of Chrysler, which filed for bankruptcy last week under the supervision of the Obama administration. DEADLINE LOOMS GM posted a first-quarter net loss of $US6 billion, compared with a loss of $US3.3 billion a year earlier. The company has lost $US88 billion since its turnaround efforts began in 2005 under former Chief Executive Rick Wagoner. The losses are expected to mount in the current quarter when GM shuts down US manufacturing plants for up to nine weeks in an effort to run down inventory and lessen its exposure to bankrupt former subsidiary Delphi. GM is facing a government-imposed June 1 deadline to reach agreements to overhaul its operations and cut more than $US40 billion in debt. It has taken $US15.4 billion in emergency loans from the US Treasury and expects that to rise to $US18 billion by the end of the month. Under the restructuring plan GM detailed last month, the government would own a majority stake, effectively nationalizing the 100-year-old Detroit-based automaker.



1 user reading this topic (1 Guest and 0 Anonymous)


« Previous Topic · Motorsports · Next Topic »