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Old 07-10-2008, 02:21 PM   #1
GTAHVIT
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GM Gives `No Thoughts' to Bankruptcy, Wagoner Says

GM Gives `No Thoughts' to Bankruptcy, Wagoner Says (Update1)

http://www.bloomberg.com/apps/news?p...h3gnY&refer=us

Quote:
By Margot Habiby and Jeff Green

July 10 (Bloomberg) -- General Motors Corp., the biggest U.S. automaker, has ``no thoughts whatsoever'' of bankruptcy, Chief Executive Officer Rick Wagoner said.

GM's cash will remain ``robust'' this year, and the company would be able to tap additional funds as needed, Wagoner said today in a speech to the Dallas Chamber of Commerce. A Merrill Lynch & Co. analyst said July 2 that GM may need to raise $15 billion and that bankruptcy is ``not impossible'' should U.S. economic conditions worsen.

``When things like this happen, some of the critics call this the end of the U.S. auto industry as we know it,'' Wagoner said. ``We're taking the tough but necessary actions to keep GM competitive over the long, long term.''

His comments may ease investors' concern that the Detroit- based automaker lacks enough liquidity after three years of losses and a 16 percent decline in 2008 U.S. auto sales. Wagoner said GM ``has a lot of money'' for a company of its size.

GM had $24 billion in cash and marketable securities and access to about $7 billion in undrawn U.S. loans on March 31, at least $6 billion more than it expected would be needed to weather a U.S. sales slide, Chief Financial Officer Ray Young said May 13.

GM fell 61 cents, or 5.9 percent, to $9.72 at 2:23 p.m. in New York Stock Exchange composite trading, paring an earlier decline. The shares have fallen 60 percent this year.

To contact the reporters on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: July 10, 2008 14:29 EDT

Edit:


(Update2)


Quote:
By Margot Habiby and Jeff Green

July 10 (Bloomberg) -- General Motors Corp., the biggest U.S. automaker, has ``no thoughts whatsoever'' of bankruptcy, Chief Executive Officer Rick Wagoner said.

GM's cash will remain ``robust'' this year, and the company would be able to tap additional funds as needed, Wagoner said today in a speech to the Dallas Chamber of Commerce. A Merrill Lynch & Co. analyst said July 2 that GM may need to raise $15 billion and that bankruptcy is ``not impossible'' should U.S. economic conditions worsen, pushing GM shares to a 54-year low.

``When things like this happen, some of the critics call this the end of the U.S. auto industry as we know it,'' said Wagoner, 55. ``We're taking the tough but necessary actions to keep GM competitive over the long, long term.''

His comments may ease investors' concern that the Detroit- based automaker lacks enough cash after three years of losses and a 16 percent decline in 2008 U.S. auto sales. Wagoner said GM ``has a lot of money'' for a company of its size.

``With GM's liquidity, near-term bankruptcy talk is overdone, so Wagoner is right to dismiss it,'' said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee. ``GM will need capital late in 2009 or early 2010, and a lot can happen between now and then.''

GM had $24 billion in cash and marketable securities and access to about $7 billion in undrawn U.S. loans on March 31, at least $6 billion more than it expected would be needed during a U.S. sales slide, Chief Financial Officer Ray Young said May 13.

Shares Slide

GM fell 87 cents, or 8.4 percent, to $9.46 at 3:07 p.m. in New York Stock Exchange composite trading. The shares have tumbled 62 percent this year, the most among 30 companies in the Dow Jones Industrial Average.

Wagoner reiterated other executives' comments this week that Hummer is the only one of GM's eight U.S. brands being studied for a possible sale or shutdown. GM said June 3 it would review the future of that sport-utility vehicle line as $4-a- gallon gasoline spurs consumers to embrace cars and shun trucks.

``We don't have any plans to eliminate more brands,'' Wagoner said.

U.S. buyers' shifting tastes pose a threat to GM's bid to fend off Toyota Motor Corp. and keep the global sales crown. Second-quarter worldwide sales were little changed, GM said last week. Toyota beat GM by 159,000 vehicles in the first three months, when GM said sales fell less than 1 percent.

GM hasn't seen any drop in sales because of bankruptcy rumors, Wagoner said.

`Less Speculation'

``Obviously it would be great if we had less speculation along lines that we think is quite inaccurate,'' he told reporters after the speech.

GM last posted an annual profit in 2004, and the lack of earnings required a tax-accounting change last year that led to a record $38.7 billion loss. The company hasn't had a U.S. sales gain since 1999.

Assuming a worst-case scenario of continued U.S. sales declines and an inability to obtain capital, GM might have to declare bankruptcy for its North American units by the end of next year or early 2010, Gimme Credit analyst Shelly Lombard wrote in a report yesterday.

Those circumstances aren't likely, she said, putting the chances of a filing at 25 percent.


To contact the reporters on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: July 10, 2008 15:14 EDT

Last edited by GTAHVIT; 07-10-2008 at 02:40 PM. Reason: Add updates
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Old 07-10-2008, 02:24 PM   #2
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A few more responses to Bankruptcy.

GM CEO says speculation of bankruptcy "inaccurate"

http://www.reuters.com/article/ousiv...30035220080710

GM chief executive Wagoner says company won't seek bankruptcy, has solid cash position

http://www.iht.com/articles/ap/2008/...Motors-CEO.php
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Old 07-10-2008, 07:05 PM   #3
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Why is it that the media is always ready to destroy anything American while at the same time telling us that everything everyone else does is so great. I for one am getting tired of these sudo reporters who instead of just giving us the facts keep giving us their opinions and you already know what they say about opinions.
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Old 07-10-2008, 09:22 PM   #4
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The panic in the market and spread by the attention starved yellow journalists is just getting out of hand. If people thought rationally about the state of the market and economy stocks wouldn't be nearly as low as they are now (yes the economy is in bad shape, but not as bad as the breathless media is making it out to be). If you can keep your head, there are tons of oversold stocks that are actually pretty healthy out there. This just makes GM stock a great value now, though I do feel bad for anyone who owned shares before the panic set in. I'm a proud American, but it embarrasses me how excitable we can be sometimes.
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