Wednesday, February 18, 2009

To Laugh or Cry...

..."lack of due dilligence" as sort of a catch phrase for "someone is sort of accountable for this or that negative result" has been bandied about lately.

Feb. 18 (Bloomberg) -- General Motors Corp. asked the U.S. for as much as $16.6 billion in new loans, more than doubling the aid to date, and said it needs some of the cash next month to survive as it sheds brands and cuts 47,000 more jobs worldwide.

Chrysler LLC, propped up like GM with federal assistance, said it’s seeking $5 billion more from the government and will shed 3,000 more positions.

The automakers’ fates are now in the hands of the Obama administration, which must decide whether to give them the additional money or let them go bankrupt. Robert Gibbs, President Barack Obama’s chief spokesman, yesterday didn’t rule out forcing the companies to restructure through bankruptcy.

“Most of the low-hanging fruit when it comes to cost cutting is gone,” said Rebecca Lindland, an IHS Global Insight Inc. analyst in Lexington, Massachusetts. “You get to the point where you’re throwing good money after bad.”

GM and Chrysler met a deadline yesterday to report progress in revamping operations with $17.4 billion in loans granted so far and got a boost from tentative accords with the United Auto Workers to cut labor costs. Now, they must show the U.S. by March 31 that they can return to profit in order to keep the money.

‘Tighten Things Down’

“We will tighten things down and hang on as long as we can” as the new request is considered, GM Chief Executive Officer Rick Wagoner said today in a Bloomberg Television interview. The Detroit-based automaker said it will run out of cash without a payment of $2 billion in March.

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