GM is sinking quick.
The auto company is standing firm, but they're basically just buying time.If they don't merge with Ford, then it's almost over. Ford is going down too, but not as bad as GM.
Hold onto your Turbobuick GM parts- they'll be real valuable oneday soon.
Article regarding this...
GENERAL MOTORS tumbled to its lowest in New York trading in 58 years and Ford Motor fell to almost a 26-year low as the US car sales outlook worsened and Standard & Poor's said it might cut their debt deeper into junk.
The market researcher J.D. Power & Associates has estimated that US car and light-truck sales will fall to 13.6 million this year and 13.2 million next year. The total was 16.1 million last year, and it has not been as low as the 2009 projection since 1992.
An S&P analyst, Robert Schulz, said: "These companies certainly wouldn't choose to file bankruptcy but they could find themselves at a point where their liquidity reached the point where they no longer could run their businesses. We think they could be pushed into that."
The pressure on GM and Ford, the largest US car makers, comes after the industry's vehicle sales tumbled 27 per cent last month, the biggest monthly drop since 1991.
The credit crisis has reduced access to loans for potential buyers after sales had already been hurt by petrol prices that rose to a record in July and by the housing slump that sapped consumer confidence. S&P, which rates debt of GM and Ford six steps below investment grade at B-, said both car makers had "adequate liquidity" for this year while facing a "serious challenge" next year. The ratings company put both on credit watch with a negative outlook.
"We were fortunate to go to the markets at the right time," said a Ford spokesman Mark Truby, referring to $US23.4 billion ($35 billion) borrowed in late 2006.
The company is reviewing its liquidity and would give an update when it released third-quarter financial results, he said. Ford has not said when the release, typically later in October, will be.
Renee Rashid-Merem, a GM spokeswoman, said: "We face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets. But bankruptcy is not an option General Motors is considering."
GM fell 31 per cent to $US4.76 in New York Stock Exchange composite trading, the lowest close since March 30, 1950. Ford slid 22 per cent to $US2.08, the lowest since October 1982. "Buyers are both voluntarily and involuntarily exiting the US new-vehicle market," said Jeff Schuster, executive director of automotive forecasting for J.D. Power.
"The global market in 2009 may experience an outright collapse."
Shares of GM and Ford were on the list for the US Securities and Exchange Commission's three-week ban on short selling, which ended on Wednesday. In a short sale, traders borrow shares, sell them and hope to make a profit by buying back the stock at a lower price and returning it.
Kevin Tynan, an analyst at Argus Research Corp in New York,
