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US automaker GM reports losses of $6 billion

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Thursday, May 7, 2009

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United States automobile company General Motors announced it has lost US$6 billion in the first quarter of 2009, amidst heavy declines in revenues. Not including special items, the firm said it had lost a net $5.9 billion dollars, or $9.66 per share.

In the first quarter of last year, GM had reported a loss of $381 million, or $0.67 per share. Most financial analysts had forecast the automaker's losses to be over $6.7 billion, or $11.05 per share. GM had also reported that it had spent $10.2 billion in an effort to prevent bankruptcy. The manufacturer has received over $15 billion in bailout money from the federal government.

The company has a deadline set at June 1 to draw up a restructuring plan. If it doesn't do so by then, it will be obliged to file for bankruptcy protection.

"We're focusing very much on the cost side of the business but once you start losing revenues you get into a vicious circle from which you can't recover," said Ray Young, the chief financial officer for GM.

"We continue to see a 60-80 percent chance of a GM bankruptcy. While the GM equity today is largely uninvestable, we increasingly believe GM may emerge substantially stronger from a bankruptcy - provided the Chapter 11 process is not overly drawn out - particularly given the scope of targeted dealer cuts," analyst Himanshu Patel said.


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  This page is archived, and is no longer publicly editable.
Articles presented on Wikinews reflect the specific time at which they were written and published, and do not attempt to encompass events or knowledge which occur or become known after their publication.

Got a correction? Add the template {{editprotected}} to the talk page along with your corrections, and it will be brought to the attention of the administrators.

Please note that due to our archival policy, we will not alter or update the content of articles that are archived, but will only accept requests to make grammatical and formatting corrections.

Note that some listed sources or external links may no longer be available online due to age.

The text of this article is licensed under the terms of the Creative Commons Attribution 2.5 License


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