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  1. Join Date
    Jul 2008
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    131
    #1
    G.M., Once a Powerhouse, Pleads for Bailout

    By BILL VLASIC
    Published: November 11, 2008
    New York Times

    DETROIT — Just two months after celebrating its 100th birthday, General Motors is facing the grim prognosis that it may not survive to see another year unless it is rescued by a bailout from the federal government.
    Rick Wagoner, G.M.’s chief, said his company needed help immediately.
    Its cash cushion has been shrinking by more than $2 billion a month this fall. If that continues, G.M.’s reserves will fall below the minimum of $10 billion in cash it needs to run its global operations by January, the company said in its third-quarter S.E.C. filing.
    In that event, G.M. said it might be unable to pay its suppliers, meet its loan covenants or cover health care obligations in its labor contracts. The extent of G.M.’s financial crisis, revealed in greater detail in its filing than it acknowledged before, is proving to be far worse than investors and analysts expected just last week.
    Only an emergency federal bailout seemingly stands between G.M. and a bankruptcy filing, according to industry analysts.
    As the G.M.’s crisis deepens, the pressure increases in Washington to pass a rescue package for up to $50 billion in assistance for Detroit’s troubled Big Three or risk the economic fallout of a bankruptcy that would affect hundreds of thousands of jobs that rely on the auto industry.
    Democratic Congressional leaders said Tuesday they would push next week for emergency legislation to help the automakers.
    Despite a recent plea from President-elect Barack Obama, the Bush administration has been unwilling to commit any funds to Detroit beyond a $25 billion loan program to assist the companies in developing more fuel-efficient cars.
    G.M.’s chairman, Rick Wagoner, says the company cannot wait for aid that may come when Mr. Obama takes office in January.
    “This is an issue that needs to be addressed urgently,” Mr. Wagoner said in an interview with Automotive News.
    Investors drove G.M.’s stock down for a fifth consecutive day Tuesday. The company’s market value fell to about $1.7 billion, a more than 90 percent decline from a year ago. A spokesman for G.M., Steve Harris, said Tuesday that Mr. Wagoner’s job was not in jeopardy and reaffirmed the G.M. board’s support for its embattled chairman.
    “Nothing has changed relative to the G.M. board’s support for the G.M. management team during this historically difficult economic period for the U.S. auto industry,” he said.
    The depths of G.M.’s problems came to light in its federal filing that painted a bleak picture of a company that has lost more than $20 billion this year and is in danger of not being able to pay its bills in a few weeks.
    “We do not currently expect our operations to generate sufficient cash flow to fund our obligations as they come due,” the company said. “And we do not have other traditional sources of liquidity available to fund these obligations.”
    G.M. ended the third quarter with $16.2 billion in available cash. The company estimates it needs a minimum of $11 billion at any time to pay its bills.
    At its current pace, G.M. will have less than $10 billion by the end of the year — and that is after cutting 30 percent of its white-collar work force, halting the development of new models and temporarily shutting down most of its North American assembly plants in a desperate bid to save money.
    The credit-rating agency Standard & Poor’s cut its ratings on G.M. debt further into junk status on Tuesday, and Fitch ratings is also considering another cut.
    Analysts said G.M.’s inability to raise cash, other than from federal loans, will force another, deeper round of restructuring — at a minimum — to keep it solvent.
    “We expect cash outflows to quickly reduce the company’s liquidity during the next few quarters, perhaps to levels that would force G.M. to consider a financial restructuring, even if it does not file for bankruptcy,” S. & P. said.
    By its own admission, G.M. cannot cut its costs fast enough to balance the sharp fall in revenue in what is the worst United States vehicle market in 15 years.
    “Looking into the first two quarters of 2009, even with our planned actions, our estimated liquidity will fall significantly short of the minimum required to operate our business,” the company said its third-quarter filing.
    G.M. said the deterioration in its balance sheet could make it difficult to pay its suppliers by the end of this year, and it has no other sources of cash to tap except federal funds.
    It also said it might not be in compliance with its credit agreements, including a $4.5 billion revolving credit line and a $1.5 billion term loan. “There is no assurance we could cure a default, secure a waiver or arrange substitute financing,” G.M. said.

  2. Join Date
    Feb 2008
    Posts
    14,181
    #2
    Yep GM is in real serious trouble. And not only them, all BIG 3 US carmakers are in big big trouble. We could have the death of the US auto industry , and all our cars will now come from Asia and Europe.

  3. Join Date
    Nov 2005
    Posts
    39,081
    #3
    haha

    GM stock



    bilis na..

    ayaw pa mag zero e

  4. Join Date
    Feb 2008
    Posts
    14,181
    #4
    The media says its a 60 year low. Pathetic, they fail to say that 60 years ago $3 can go a long way now you get a gallon of gas That is what GM stock is worth now

  5. Join Date
    Nov 2005
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    39,081
    #5
    GM's market capitalization today is $1.88B

    compare that to Toyota's market cap $99.03B today

    Pathetic

  6. Join Date
    Jul 2008
    Posts
    131
    #6
    Haaaaayyyy!!!! Sarap talaga muhay sa AMERICA. May Financial Crisis na, May mga mawalan pa ng trabaho, May mabaon pa sa utang.

    I wonder how long it will take before the US will finally call it quits.

  7. Join Date
    Sep 2003
    Posts
    23,289
    #7
    Paano yung mga chevy cars dito sa pinas? Kawawa dati yung mga buyers ng Daewoo Espero at Racer. Now uulit na naman?
    Last edited by Monseratto; November 13th, 2008 at 06:15 PM.

  8. Join Date
    Oct 2002
    Posts
    1,842
    #8
    i think they are shifting in building fuel efficient cars. makakarecover ulit iyan

  9. Join Date
    Nov 2005
    Posts
    39,081
    #9
    Every car maker - japanese, korean, european, chinese - also make fuel efficient cars.

    GM won't have any advantage even if it makes fuel efficient cars.

  10. Join Date
    Sep 2005
    Posts
    3,828
    #10
    Ayan panay sirain at matatakaw sa gas lang kasi ang ginagawa nilang sasakyan. Sablay talaga sa quality gawa nila.

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GM in trouble