Cash-guzzler

1 August 2008 By Robert Cyran Follow @rob_cyran

The carmaker s US operations are in freefall, liquidity is worsening, and writedowns seem unending. Worse, GM has shown less willingness than Ford to face reality and focus on small cars. Until it does, investors should give its plans to raise capital the cold shoulder.

This content is for Subscribers only

Context News

GM reported a loss of $15.5bn in the second quarter. This is the third largest loss in the car company's history. Approximately $9bn of the loss came from special items that were predominantly noncash charges for restructuring costs, an increased reserve for Delphi, and an impairment in its GMAC interest. The remaining $6.3bn adjusted loss included a $2bn impairment for its leasing business.

Revenues for the quarter were $38.2bn, a fall of 18% from the same period last year. North American revenue fell 33%.

GM had $21bn of available cash and equivalents, a reduction of $2.9bn compared to the end of the first quarter. GM also has $5bn worth of undrawn credit facilities and plans to draw down $1bn of this revolver.

Email a friend

Please complete the form below.

Required fields *