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Thread: GM says GMAC might be toast

  1. #1
    Vulture of The Western World Eric's Avatar
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    GM says GMAC might be toast

    Bad news kept piling up for General Motors Corp. on Monday as its shares plunged to their lowest point in 60 years and the company said in a government filing that the mortgage unit of its finance arm may not survive.

    GM also said that Delphi Corp., its former parts operation that was spun off as a separate company in 1999, may not be able to emerge from Chapter 11 bankruptcy protection.

    GM shares dropped $1, or 23 percent, to close at $3.36.

    They earlier plummeted as low as $3.02 on increasing worries about accelerating cash burn and mounting losses. That marked the automaker's lowest share price since Dec. 2, 1946 when it hit $3, according to the Center for Research in Security Prices at the University of Chicago. The price is adjusted for splits and other changes.

    Before the markets opened Monday, Brian A. Johnson of Barclays Capital cut his rating on GM to "Underweight" from "Equal Weight" and slashed his price target for the Detroit-based automaker to $1 from $4.

    Johnson said that without additional funding, GM's gross cash will likely fall below minimum levels in the first quarter of next year.

    The analyst also said that while additional government assistance will likely decrease the likelihood of a bankruptcy protection filing at the nation's largest automaker, it also would likely significantly dilute its equity.

  2. #2
    Senior Member Kwozzie1's Avatar
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    They have closed in Australia

    GMAC announced a couple of weeks ago they were pulling out of Car Dealer Finance here

    GE are doing similar
    Rex
    On the Sunshine Coast, in the Sunshine State Queensland (QLD), Australia

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