GM posts whopping $15.5 billion quarterly loss

What do you get when you own 49% of a subprime mortgage company and make gas-guzzling SUV’s in a period of record-high gas prices?  You get a big loss.  GM reported a $15.5 billion loss for the quarter.  While $9 billion was tied to one time expenses the operating loss for the quarter clocked in at just over $6 billion.

From Market Watch:

General Motors Corp., scrambling to adjust its operations and align production toward smaller cars, reported Friday another massive loss as the auto-buying public’s shift away from its profitable truck and SUV lines gathered momentum.

GM’s stock, part of the Dow Jones Industrial Average, lost as much as 10% in early trading but recovered at midmorning to $10.77, down nearly 3% on the session.

In the past month, GM shares have tested levels not seen since 1954, with plunging sales and fears of a cash crunch fueling concerns in some quarters over a potential bankruptcy.

Egan-Jones Rating Co. said that GM, in light of the share and earnings declines, is running out of options and that it actually has far less cash than it appears.

“After adjusting for most suppliers being paid right after the first of each month … true cash is negative,” the credit-ratings agency said. “The plunging sales call for drastic action, but unfortunately, management is unlikely to do much.”

Share This

This post was found on BlownMortgage
Follow the link to get to the orginal message.