Rick and the Board are doing a "wonderful" job of getting GM guided into
Chapter 11 Bankruptcy. Next question is when GM files for
bankruptcy-late '08, early '09, or...?
GM Is Lowered to `Sell' by Goldman on Sales Outlook (Update1)
June 26 (Bloomberg) -- General Motors Corp., the largest U.S.
automaker, was cut to ``sell'' at Goldman, Sachs & Co., saying the
shares will continue to slide on a worsening sales outlook. GM fell as
much as 11 percent in New York trading.
Soaring gas prices, falling consumer confidence and tighter credit
conditions will weigh on auto-industry profits, Goldman wrote in a
report today. GM, which had been rated ``neutral,'' may need to raise
money and cut its dividend as its cash flow deteriorates, the analysts
The automaker's U.S. sales tumbled 16 percent this year through May as
consumer preferences shifted to cars and smaller sport-utility vehicles.
GM has cut truck production and announced plans to close factories.
GM fell $1.28 to $11.53 at 9:37 a.m. in New York Stock Exchange
composite trading, after dropping as low as $11.35. The shares declined
49 percent this year through yesterday.
Fitch Ratings yesterday cut GM's long-term debt rating to B-, six steps
below investment grade. Fitch's outlook on GM is negative, meaning the
rating may be downgraded further.
This week, GM said it would reduce production of pickups and
sport-utility vehicles by 170,000 more units this year. The automaker
also began offering interest-free financing for as long as six years on
many 2008 models.
Goldman also cut ratings on Tenneco Inc., the world's largest maker of
automobile exhaust systems, to ``neutral'' from ``buy'' and on Lear
Corp., the second-biggest maker of vehicle seats, to ``sell'' from