General Motors warns it could run out of cash
General Motors has reported a third quarter operating loss of $4.2bn (2.66bn) and has warned that it will run out of cash in the first half of 2009 if economic and market conditions do not improve.
The car manufacturer, which owns Vauxhall amongst others, is now lobbying for a $10bn (£6.2bn) US government bailout.
The company says it will cut jobs and costs and has also suspended merger talks with Chrysler to focus on its mounting cash problems. They posted a third-quarter net loss of $2.5bn (£1.6bn), compared with a loss from continuing operations of $42.5bn (£27bn) a year ago.
Revenue fell to $37.9bn (£24bn) from $43.7bn (£28bn) in the same period in 2007. GM said it would shed a number of management and cut $2.5bn (£1.6bn) in capital spending in 2009. It is unclear if marketing roles and budgets will be affected.
Chief executive Rick Wagoner has reportedly been in discussions with the US government to help save the ailing manufacturer, which owns the brands of brands of Buick, Cadillac, Chevrolet, Daewoo, GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling.
In a statement, the company says: “We will be near our minimum threshold for operating cash for the remainder of 2008, and will be significantly short of that level by the end of June without an improvement in market conditions, a major asset sale or access to new loans or cash support. We need at least $11bn (£7bn) in cash to pay the bills each month.”
