GM gets some wind behind its sails

17 March 2009

Bloomberg - General Motors, fighting off bankruptcy speculation as it relies on $13.4 billion (R134 billion) in US loans, was gaining momentum after saying it could survive through March without $2 billion more in aid, its top finance executive said on Monday.

"The first two months of results show that we've got some wind behind our sails here," GM chief financial officer Ray Young said on Friday.

The gains helped erase losses in the first week of March when the Detroit car maker was forced to pen two statements assuring investors it was not interested in bankruptcy after an auditors' opinion and news reports raised questions about GM's survival.

Its $1.6 billion market cap remains half that of toy car maker Mattel and it lost 86 percent of its value in the past year. It has tallied up $82 billion in losses since 2004, the last year it was profitable, and its US sales fell more than 50 percent in the first two months of 2009.

"The Detroit car makers can't avoid bankruptcy without government help, unless the US market shows a miraculous recovery," said John Casesa, a managing partner at consultancy Casesa Shapiro.