02 Jul
A GM Chapter 11?
Douglas A. McIntyre
Merrill Lynch has said what many people already believe. One of the large US car companies could go into bankruptcy. Merrill’s comments target GM (GM). The brokerage’s analysis is that the biggest US car company will need to raise $15 billion to make it through current conditions. According to Reuters, Merrill Lynch analyst John Murphy cut GM to “underperform” from “buy”. The threat to GM is no longer on the expense side. When the company was in deep trouble three years ago, sales were fairly robust. In 2006, the US market had total vehicle sales of 17 million. GM was successful in making its target of taking $9 billion in annual operating costs out of the firm. If sales had stayed steady, GM would have been fine. More