GM warns it could run out of cash in 2009

DETROIT -- General Motors warned Friday that it has only a minimum amount of cash to operate its business through the end of the year, and even with planned restructuring will fall short of cash in the first two quarters of 2009.

"Even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve," the automaker said at the end of its third-quarter earnings report, released an hour later than planned.

The situation won't change unless GM receives "substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current of future programs, or some combination of the forgoing," the company said.

The automaker also said the liquidity crisis has forced it to back off plans to acquire stuggling rival Chrysler.

"While the acquisition could potentially have provided significant benefits, the company has concluded that it is more important at the present time to focus on its immediate liquidity challenges, and, accordingly, considerations of such a transaction as near-term priority have been set aside," GM said.

Chrysler issued a statement saying they don't comment on merger talks "as many times, they do not come to fruition."

GM reported a $2.54 billion loss for the third quarter, and so far this year has lost $21.26 billion.

In slides accompanying a press conference Friday afternoon, GM says it is facing its worst financial and credit crisis in more than 70 years. The turmoil is spreading globally, it says, slowing European markets, growth in Asia Pacific, and threatening to put the brakes on sales in Latin America. Throughout GM's recent downturn, it has relied on global sales to bolster its bottom line.

The automaker announced cost-cutting intiatives to raise another $5 billion, including selling Hummer, ACDelco and a technical and manufacturing center in Strasbourg, France. That should riase some $2 billion to $4 billion.