Welfare Queen

American Leyland continues to bleed cash, no matter how many fresh greenbacks Washington pumps in:

G.M. said it lost $6 billion in the first quarter as its sales around the world fell 40 percent and revenue was cut nearly in half.

But the most concerning number is the $10.2 billion in cash that G.M. depleted in three months, the equivalent of $113 million a day. That is nearly twice the company’s rate of cash burn in the fourth quarter.

As of March 31, the company had $11.6 billion on hand, which is roughly the minimum level of liquidity that G.M. has said it needs to keep operating. Since then, the government has loaned G.M. an additional $2 billion.


The last time GM earned a profit, it was less than a billion dollars in a quarter. That was in a US market where consumers bought about 16 million cars a year, more than a quarter of which were GM products. The domestic market has contracted to under 10 million cars a year, with less than 20% from GM. And GM’s market share is going to shrink further, as it eliminates half its brands and a third of its models.

Does anyone believe GM can ever pay back the tens of billions it owes to US taxpayers? If so, I’ve got a Chevy Aveo I’d love to sell you.


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