GM Posts $6B 1Q Loss, Spends $10.2B In Cash

Source: AP

Automaker Spent $10.2 Billion More In Cash Than It Took In

May 7, 2009

DETROIT -- General Motors Corp. lost $6 billion in the first quarter and its revenue was cut nearly in half as car buyers feared the wounded auto giant would enter bankruptcy and no longer honor its warranties.

The Detroit-based company also said it spent $10.2 billion more cash than it took in from January through March, mainly because revenue dropped by a staggering $20 billion, or 47 percent.

Chief Financial Officer Ray Young said talk of the company going into bankruptcy protection appeared to have scared some consumers away from buying GM vehicles. GM faces a June 1 government deadline to finish a restructuring plan or go into bankruptcy protection.

"The concern about bankruptcy is having an impact on our sales," Young told reporters Thursday morning.

He said a U.S. government guarantee of GM and Chrysler warranties was not revealed by the Obama administration until March 30. So, for most of the quarter, consumers were unsure about warranty protection. Chrysler last week filed for bankruptcy protection.

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