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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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November 7, 2008 2:49 PM ET
General Motors and Ford both burned though cash at an alarming rate in the third quarter. GM, in particular, may be nearing bankruptcy, according to analysts. The automaker went through nearly $7 billion in cash in the third quarter, ending the period with $16 billion in available cash. Ford didn’t fare much better. The second-largest U.S. automaker went through $7.7 billion, ending the quarter with about $19 billion in available cash. Cash burn is a new problem for Ford—and not so new for GM—Rebecca Lindland, an IHS Global Insight analyst, told Bloomberg. Ford’s quarterly loss, however, wasn’t as bad as GM’s. Ford’s operating loss for the quarter stood at $2.98 billion, while GM posted a $4.2 billion third-quarter operating loss. Both automakers have been approaching governments in the U.S. and in Europe for financial assistance. Ford said in a conference call it expects it will continue to hold a substantial cash balance, with between $16 billion and $18 billion as of the end of the year, even without government-sponsored aid, thanks in part to cuts in annual capital spending. But GM was actively seeking out help from Uncle Sam, according to analysts. “GM’s third-quarter results made it clear that, without government intervention, GM is headed for bankruptcy,” wrote Shelly Lombard in a report issued after the earnings release. “And we aren’t referring to the $25 billion of federal loans designed to incentivize production of fuel-efficient vehicles. At this point, that’s like bringing a Band-Aid to a train wreck.” GM said it is already close to the minimum amount of cash it needs just to run its business day to day, “leaving nothing to cover the huge operating losses its North American business continues to incur,” added Ms. Lombard.
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CRAIN'S BENEFITS OUTLOOK 2009
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