Financial Turmoil, Weaker Sales Batter GM Shares

By: Associated Press Email
By: Associated Press Email

New York (AP) After a bleak day on Wall Street, investors are tracking general motors to see if it crumples under pressure.

The automaker's shares lost nearly a third of their value Thursday, tumbling to their lowest level in nearly 60 years. The fall followed Standard & Poor's ratings services announcement that the automaker's credit could fall further into junk status, making
it even tougher to borrow money.

One analyst calls the warning “shooting at the life boats.” GM had $26 billion worth of liquidity at the end of June. But it has been burning through cash at a pace of more than $1 billion a month and needs about $11 billion to $14 billion on hand to keep
operating.

The chairman of The Center for Automotive Research in Ann Arbor says a takeover is possible except for one thing -- lots of debt.


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