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GM Losses Hit $6bn

May 8th, 2009
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General Motors, which is attempting to stave off bankruptcy, made a loss of $6 billion and burned through $10.2 billion in cash during the first quarter of the year.

GM said it was accelerating its restructuring after suffering the losses amid the continued slump in global car markets.

The company is surviving on a US Government bail-out and has until June 1 to produce restructuring plans to satisfy the US president Barack Obama or face being forced into Chapter 11 bankruptcy.

Fritz Henderson, GM’s chief executive, said: “Our first quarter results underscore the importance of executing GM’s revised viability plan, which goes further and faster to lower our break-even point.”

GM’s $6 billion loss for the quarter compares with a loss of £3.3 billion for the same period last year. Its sales for the first three months of the year were $22.4 billion compared, a drop of 47% compared with the first quarter in 2008.

GM warned that it would make further reductions among salaried and executive employees to try to break even. It said it needed to reduce drastically its break even point to enable it to be profitable at the current below-trend sales levels.
Mr Henderson said: “This is a defining moment in the history of General Motors, and we are committed to our plan, which we believe will lead to a stable and sustainable operating structure with a strong balance sheet.”

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