General Motors (GM) recently released another awful quarterly report, announcing a $2.5 billion loss on revenues of $37.9 billion (down $5.8 billion on Q3 2007). Over the last quarter, GM burnt nearly $50 million cash per day. Based on a 30 September balance of $16.2 billion in cash, marketable securities and readily available assets, GM has approximately 350 days of runway. This back of the envelope calculation is typically reserved for startups, not a 100 year old company with a 1/4 million employees.
The current global economic situation will have a significant impact on GM, but it is an accelerant rather than the cause of GM’s current woes.
Despite growing revenues GM has lost market share to competitors such as Toyota (TM).
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GM and the US auto industry in general have failed to address the key issues (labor costs, product development and supply chain management) they are facing:
...resulting in the destruction of shareholder value: