This morning, General Motors (GM) reported a quarterly loss of nearly $10 billion, and the company lost over $30 billion last year. GM’s cash balance is now down to $14 billion. CEO Rick Wagoner is about to ask the Treasury for even more cash so the company will make it through this year.
The numbers here are staggering. John Carney at Clusterstock summed it well: Imagine lighting $1,000 on fire every second of every day for three straight months. That’s essentially what GM did.
Last week, I wrote about GM’s January sales report:
“General Motors’ sales plummeted 48.9%. This came despite GMAC being reclassified as a bank and qualifying for TARP funds so it could offer vehicle loans to buyers with lower credit scores.
“How important is vehicle financing to sales? GMAC’s vehicle loans were used for only 8% of new GM sales in the fourth quarter, compared with 43% a year ago. In other words, the car companies aren’t merely facing a sales credit but a credit crunch as well.”
Shares of GM continue to be a Sell in Portfolio Grader.