Business

General Motors Financial Loss. America Buys Less Cars...
by Milota Sidorova

General Motors company has released its financial review for 2Q last Friday. As expected, the largest American and the fifth largest worldwide automaker has finished its sum again in red zone numbers.
Following its financial turmoil during past few years, literally with 38 billion dollar loss in 2007, the report only reinforces doubts and fears hanging on General Motors.

Company balanced $ 15,5 billion loss – the third highest during last hundred years. In fact, reported drop has topped Wall Street expectations almost four times higher. Pure announcement of loss has declined share value minus 11 percent immediately. Excluding shares GM lost almost $11.21 per share, instead of forecasted $2.67, expectation released on New York's market.

The drops are clearly linked with continuously declining demand for cars. When discussed oil price issues, only North American region reported 20 percent cut on sales. The general flop is referred to fading light trucks sales, that in fact create the very core, literally 60 percent of total gain. However, the situation remains the same for every car maker in U.S.

Despite of recording break out, the company, producing famous Cadillacs, Chevrolets, Opels, Pontiacs, Hummers and many others stay positive. Perhaps, they can handle upcoming quarter 2008.
Most of the concerns claimed, whether company operates enough cash to run its worldwide business.
According representatives they will need at least $11 billion, but Chief Financial Officer Ray Young said GM is on track to free up $15 billion in liquidity with cost-cutting, asset sales and new borrowing under a July plan intended to assure investors that the automaker can ride out the downturn. The inner strategy to adapt new market conditions also counts with 5,000 cut off white collar jobs.

July 2008 balanced with $21 billion in cash and $5 billion in undrawn credit.

Representatives also explain that declining lease costs loose the company at least $2 billion. However, the latest trend among Americans was to rent a car, and sell it in auction after its lease expires. Let's count troubled oil prices, consequently 18 percent less drivers on the roads, higher demand for public or alternative – health friendly transport, one must be sure, that they have to adapt, they have to react quickly.


related story: http://news.yahoo.com/s/nm/20080801/bs_nm/gm_dc;_ylt=Aii8pnFIreGTBeZj_tSFyNas0NUE

by Milota Sidorova for PocketNews (http://pocketnews.tv)

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edited by Beata Biskova

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posted by Blog TechSource @ 2:58 AM