GM posts $6 billion loss

May 7, 2009 – 9:49 pm – No Comment

GM had another fairly brutal quarter, losing $6 billion in the first 3 months of it’s financial year. When not including special items, the adjusted net loss was $5.9 billion for this past quarter, compared to an adjusted net loss of only $381 million for the same quarter last year.

GM said the downturn in the economy was the culprit in the increase in losses. It said industry sales volume was down 21% globally in the first quarter when compared to the same quarter 2008.

The news led CFO Ray Young to warn of an upcoming bankruptcy filing by GM. With numbers like these, it is more and more likely to actually happen.

“I think bankruptcy is highly likely, not because the losses are so bad, but because everyone has realized that this company needs fundamental restructuring,” said Douglas Baird, a University of Chicago law professor who specializes in bankruptcy cases.

Chapter 11 “seems the best way to clean up the balance sheet, clean up the problems, get a fresh start.”