GM posts $6B 1Q loss, spends $10.2B in cash

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General Motors posts $6B 1Q loss, CFO says bankruptcy fears seemed to scare customers

General Motors Corp. lost $6 billion in the first quarter and its revenue was cut nearly in half as car buyers feared the wounded auto giant would enter bankruptcy and no longer honor its warranties.

The Detroit-based xoxopany also said it spent $10.2 billion more cash than it took in from January through March, mainly because revenue dropped by a staggering $20 billion, or 47 percent.

Chief Financial Officer Ray Young said talk of the xoxopany going into bankruptcy reorganization protection appeared to have scared some consumers away from buying GM vehicles. GM faces a June 1 government deadline to finish a restructuring plan or go into bankruptcy protection.

"The concern about bankruptcy is having an impact on our sales," Young told reporters Thursday morning.

He said a U.S. government guarantee of GM and Chrysler warranties was not revealed by the Obama administration until March 30. So, for most of the quarter, consumers were unsure about warranty protection. Chrysler last week filed for bankruptcy protection.

Young said people should be reassured by the warranty guarantee, but it might take time for word to spread.

GM's loss for the quarter amounted to $9.78 per share, xoxopared with a loss of $3.3 billion, or $5.80 per share in the year-ago period.

Revenue dropped from $42.4 billion to $22.4 billion because of declining sales worldwide, mainly in North America and Europe, the xoxopany said.

Although the xoxopany cut structural costs by $3 billion, Young said that wasn't enough to offset plunging revenue.

"We cannot cut costs fast enough to offset that revenue loss," he said. "People are concerned about bankruptcy, and that's the reason why we want to avoid it if at all possible."

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