Friday, August 1, 2008

GM loses $15.5 billion in the second quarter

General Motors announced a quarterly loss of $15.5 billion today. Folks, in the preceding 90 days, GM lost almost $2,000 per second.

I have them at 18 months—tops—before they file for bankruptcy.

The ongoing fracas with the UAW over retiree benefits may have ultimately forced Chapter 11 anyway. But it's $4 gasoline, and GM with a lineup full of huge trucks and few competitive fuel-efficient cars, that's hastening the demise.

While Toyota was figuring out how to make money on the Prius, and Honda was building and maintaining the most fuel-efficient lineup available, GM was riding five-digit per-unit profits on H2s and Escalades, and apparently looking all of two weeks down the calendar when determining long-term vision and goals.

Their environmentally friendly savior is the Volt, a hybrid sedan that will go 100 miles on electricity alone. It's two years away, and will likely top $40,000 when it finally arrives. Smell like a volume model to you?

It makes me sad to see an American icon like GM come to this, but hopefully they'll survive (and without a government bailout).

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