General Motors was on the brink of bankruptcy. The company admitted it might not survive to the end of 2009 without government aid and an emergency loan. In its third quarter report GM showed multibillion dollar losses, and its shares fell to 1946 levels, heightening analysts fears of an imminent collapse. Amid the crisis other American automakers are also asking the government for tens of billions of dollars, and Barack Obama is urging the industry be saved urgently.

The American automotive giant General Motors may soon declare bankruptcy. Recently, the corporation stated that it would not be able to sustain its operations through the end of 2009 because of a lack of cash. And if the government does not help GM with a loan, the company may go down in history.
In the report published on November 7 for the third quarter of this year, the company indicated that its revenue amounted to $37.9 billion, operating loss was $4.2 billion, and net loss was $2.8 billion. Recall that over the past nine months, GM’s losses have already totaled $21.3 billion, and revenue has fallen by 11%. Over the past four years alone, the giant has lost nearly $73 billion. GM shares on the New York Stock Exchange fell yesterday to $2.89 per share. This is the level of December 1946. Deutsche Bank analysts downgraded GM shares to “sell” and cut the target price from $4 to 0. They do not rule out the possibility of the company’s bankruptcy by the end of this year. Barclays is not yet so categorical: the bank lowered its rating on GM shares to $1.
GM President Rick Wagoner said the company needs $11−14 billion to replenish working capital. At the same time, GM said that creditors may demand early repayment of $6 billion. Finally, on Monday GM announced that its main parts supplier, Delphi, cannot emerge from bankruptcy.
Other American automakers are also experiencing problems. Altogether, they are asking the government for $50 billion to save the industry. Barack Obama, elected president of the United States in November, meeting on Monday at the White House with current U.S. President George Bush, urged him to urgently help the largest American auto companies and the economy as a whole, The Wall Street Journal writes. How much cash injections will help change the situation in the long term is still unclear. To survive a couple of months and close cash gaps — certainly, but strategically the situation will remain extremely difficult.