US automaker GM reports losses of $6 billion
Thursday, May 7, 2009
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.
"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.
- "Sales slump doubles losses at GM" — , May 7, 2009
- Agence France-Presse. "GM reports $6bn loss in first quarter" — , May 7, 2009