Quarterly results for General Motors (NYSE: GM) were due at 10:30 this morning, but as Amey Stone noted, 10:30 came and went and no news. Then came word that trading had been halted in the stock, which tells us something about what's in the report. And you can be pretty sure that the news is very bad indeed.
Now the third quarter results have been posted on GM's website. Here are some highlights:
* The worst news is that monthly cash burn has increased to over $2 billion per month. For the quarter, GM went through $6.9 billion, about $4.4 billion more than a year ago. Analysts have been assuming a roughly $1 billion per month burn rate, but these new figures indicate that the day of reckoning is even closer for GM.
* Revenue fell by $5.8 billion to $37.9 billion, down from $43.7 billion in 3Q 2007.
* The operating loss was $4.2 billion, worse than expected.
* GM says that it expects the market to remain "soft" into 2009. Previous statements called for a recovery in 2009, but there's no such optimism now.
* CEO Rick Wagoner is calling for more government help: "The U.S. government's actions to help stabilize the credit markets and eventually ease the credit crunch are an essential first step to the economy's and the auto industry's recovery, but further strong action is required."
The stock has fallen about 12% now that trading had resumed, to $4.21. The decline is no surprise, given the implications of the report. GM may finally have to stop saying that bankruptcy is not an option.
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Reader Comments (Page 1 of 1)
11-07-2008 @ 2:13PM
Money Advisor said...
The Oil companies are discounting the gas to HOARD REVENUES during the recession. They know hard times are coming so they all need the cash reserves. The sales are still then same as when it was $4 gallon. Nobody is buying gas and cars right now. The competition for REVENUES just begun. Price wars already started.
11-07-2008 @ 4:29PM
hooka boy said...
F*&K 'em all.... they want the $ - give it to them.. but contingent upon the CEO, the Prez & all the VP's resignations w/o any payouts.
11-12-2008 @ 12:25PM
Joe said...
Let the greed ball CEO dig into his own pocket now after all the money he stole! Goes arround comes arround!They were told this was going to happen
11-07-2008 @ 5:30PM
drumbodave said...
NO PITY FOR GM! I know former workers at GM plant in Van Nuys, CA who receive FULL pay for 15 years 'cause they did not want to relocate to another plant. Got too lazy, and never found another job anywhere, who would if GM foots the bill, then GM gives them full retirement package 2 years ago when they hit the retirement age! No wonder they are out of money, GM did this for 1,000's of former employees, and exec's, too. GM total mismanagement, they deserve to crumble.
11-07-2008 @ 5:32PM
RONNIE said...
OK GM HERE IS SOME HELP. DO NOT AND I MEAN DO NOT TAKE A SALARY FOR U OR THE OTHER EXECUTIVES AND BOARD MEMBERS, THEY MADE ENOUGH MONEY IN PAST YEARS TO HOLD THEM OVER FOR MANY MORE YEARS TO COME. I'M NOT A SHARE HOLDER BUT I GAVE U 20,000.00 AND IF I LOSE MY IRA BECAUSE OF YOU THIS WILL UPSET ME SO THAT I WILL WANT INTO YOUR OFFICE AND ASK YOU FOR A PERSONAL CHECK. GET IT.
11-07-2008 @ 5:59PM
Laissez Faire said...
If the company cannot survive it is their problem. The Govt needs to stay out of it. They should not give my hard earned tax dollars to fools that run companies into the ground. Good money after bad. Only the strong survive. Another classic case of unions destroying jobs in America.
11-09-2008 @ 1:15AM
JP said...
CEO Wagoner is a dbag.
Recently, he was in a Bloomberg interview. Intuitively, one would think a CEO would say "If the government gives us the money, I promise we will be the most competitive automaker on earth." Instead, he mentions on more than one occasion, "If we don't get this money, it'd be an unimaginable consequence. It would hurt the whole industry, and tons of jobs would be lost... I'm not blinking, I dare you."
He should be completely ashamed he's forced GM (once a staple in American strength) to grovel at the feet of the government to print more money. No one put GM to this position but its own management. At the cost of its shareholders, GM is now contagiously expanding its diseased mismanagement at the cost of the general public.
The importance of keeping the industry's employees from losing their jobs is understandable, although the management needs to acknowledge it is their complacency to blame and hand over the reins.
If CEO Wagoner wants to keep his job, then pay him in food stamps. Applying for welfare, Rick? You got it.