General Motors: building better cash coffins
Joe Weisenthal of The Business Insider reports that General Motors is officially America’s “national money pit.” The automaker is bleeding cash at an astonishing rate. One wonders when they’ll file for bankruptcy, particularly after posting a $9 billion loss in the fourth quarter of 2008.
That amount includes special items; if the numbers for normal operating expenses are taken into account ,the loss was “just” $6 billion. According to Weisenthal, that was $1.5 billion worse than analysts and pundits had predicted. Cash on hand is currently at about $14 billion, which according to Phil Lebeau is only $2 billion higher than the “bare minimum” it takes to run the company.
For all of 2008, the company lost about $31 billion.
Breaking it down
Not surprisingly, the management of General Motors wants $16.6 billion more from Washington. If they get it, it would be shocking if President Obama would allow the same leadership body to remain in charge.
But let’s look at this from a slightly different angle for a moment. A $9 billion fourth quarter loss? In order to swallow these numbers, break it down by the day. It so happens that General Motors was losing $85 million per day in the fourth quarter, which is still monstrous. Let’s go deeper:
- General Motors losses…
- Quarter: $9 billion
- Day: $85 million
- Hour: $3.5 million
- Minute: $58,333
Give thanks to The Business Insider for sharing these stupefying calculations. Per minute, General Motors lost more than the average household income for the United States in 2007. It’s certainly more than what my household earned. How about you? Would you put that money to better use?
Things do not look good for GM. They’ve been bleeding cash for decades; one wonders if the UAW had anything to do with it. GM has been in need of an overhaul in a lot of ways for some time now, and I’d love to see them return to a position of dominance as much as anyone, but I’m not sure its going to happen.