CHICAGO - GENERAL Motors will take 'every action we possibly can' to avoid bankruptcy, president and chief executive Rick Wagoner said on Friday after warning that the US automaker could run out of cash in the first half of next year.
'We're convinced the consequences of a bankruptcy would be dire and extend far beyond General Motors and therefore we are going to take every action we possibly can to avoid it,' Mr Wagoner said in a conference call. 'We need to find a way to get through this and that is really our focus.'
NEW YORK - GENERAL Motors, the biggest US automaker, said on Friday that its net loss in the third quarter was US$2.5 billion (S$3.7 billion) and it had burned through another US$6.9 billion in cash.
Shares in the group, which had been suspended, fell 10 per cent when they resumed trading.
Mr Wagoner said one example of a way to help avoid bankruptcy is a request that he and other automakers made on Thursday for US$25 billion (S$37.4 billion) in loan guarantees from the federal government.
'We've asked for funding support to address' the impact of the credit crisis on the automotive sector 'in the spirit that significant funding support went into the financial sector,' Mr Wagoner said.
Asked about whether a sale of GM was a possibility, Mr Wagoner said 'that option hadn't come up but I would say we're going to continue to scheme any ideas we can'. 'It's fair to say the announcement made today about additional operational cuts reflect things that in some ways three months ago would have seemed pretty tough decisions to make,' Mr Wagoner added.
GM on Friday warned that its estimated liquidity during the remainder of 2008 'will approach the minimum amount necessary to operate its business.
'Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount,' the company said in a statement giving its starkest warning yet.
To survive, it said it would need 'significantly' improved market conditions - highly unlikely in the current economic climate - or help from the government, suppliers or other investors.
Mr Wagoner said the automaker would do everything it could to cut costs and raise revenue by advancing the sales of assets.
He said the company was not planning on a significant improvement in demand for vehicles and must do its best to make sure 'there's adequate liquidity available including potentially that which could be supplied directly from the government in one way or another'. -- AFP
