GM Burns $6.2 Billion Cash in Q4
The cash burn fest continues over at General Motors (GM) and it is no wonder Sweden didn’t support Saab at their taxpayers expense. Over $2 Billion burning per month and somehow they are still possibly qualifying for more US gov / taxpayer money?
The AP reports:
General Motors Corp. posted a $9.6 billion fourth-quarter loss and said it burned through $6.2 billion of cash in the last three months of 2008 as it fought the worst U.S. auto sales climate since 1982 and sought government loans to keep the century-old company running.
The nation’s biggest domestic automaker said Thursday it lost $30.9 billion for the full year and expects to state in its upcoming annual report whether its auditors believe the company remains a “going concern.” GM and its auditors must determine whether there is substantial doubt about the automaker’s ability to continue it operations.
Excluding special items, GM’s fourth-quarter adjusted loss was $5.9 billion, or $9.65 per share.
That was worse than Wall Street expected. Analysts surveyed by Thomson Reuters predicted a quarterly loss of $7.40 per share on sales of $35.1 billion.
For the full year, GM’s net loss was $53.32 per share, the second-worst annual result in the company’s history. The worst loss occurred in 2007, when the Detroit-based company lost $38.7 billion, or $68.45 per share, in 2007, due largely to charges for unused tax credits.
GM’s cash burn rate, the difference between how much it takes in and how much it spends, narrowed slightly from $6.9 billion in the third quarter, reflecting GM’s restructuring efforts.
The company last year announced the closure of four assembly plants and a parts stamping factory.
Last week, a plan GM submitted to the Treasury Department to justify more loans said the company would close five more U.S. factories and cut another 47,000 jobs globally. GM also reached a tentative deal with the United Auto Workers on concessions that will reduce labor costs.
I am an optimist by nature but I have a hard time believing the “restructuring efforts” are really being effective at the moment. Four assembly plants alongside a “tentative deal” with the UAW isn’t going to do much. And regardless of bailout money it is very apparent that a huge portion of the auto industry and its suppliers’ work forces are being laid off anyway.
I am sorry but you can’t argue that millions of jobs will be lost when you are firing half your workforce even with taxpayer money. If GM isn’t forced into bankruptcy protection I will be very, very surprised…
Source:
GM posts $9.6B 4Q loss, burns through $6.2B cash
Tom Krisher and Kimberly S. Johnson, AP Auto Writers
Yahoo Finance, February 26, 2009, 8:40 am EST
