GM spokesman Jerry Dubrowski said speculation of a GM bankruptcy is inappropriate and doesn’t reflect the predominant view on Wall Street. “We have no plans to declare bankruptcy, and we don’t think it’s appropriate to continue to comment on what I would term sensational speculation by some observers,” he said.
GM has reported four consecutive quarterly losses for the first time in more than a decade. So far this year, the automaker has racked up more than $4 billion in North American losses in the face of flagging demand for its gas-thirsty SUVs, heightened foreign competition and mounting health benefit and pension obligations.
Fitch Ratings credit ratings agency lowered GM’s debt deeper into “junk” status Wednesday, a move that will make it more costly for the automaker to borrow money.
Even more stunning is the reality of GM’s deep dive in market value:
GM’s shares have lost more than 14 percent of their value this month, and its market value has slid to $13.3 billion — now one-twelfth of Toyota Motor Corp.’s $164 billion market value.
Morgan & Company has some particularly revealing graphs about the position of US automakers.
This comes on the heels of news that General Motors, just this week, announced that it will be restating earnings from 2001 and forward.
A GM spokesman had this to say: ”The issue here was that we basically booked the income in the wrong period.”
The 8-K – filed with the SEC - is here. It describes the reason for restatement.