Detroit's Big Three Need Cash -- Fast

Detroit's Big Three need cash -- fast

"The cash burn at GM -- estimated to be roughly $1 billion a month -- Ford Motor Co. and the privately held Chrysler LLC is likely to accelerate as sales of gas-guzzling trucks and SUVs keep tanking and cars and crossovers fail to fill the revenue void. All of which is sparking a new round of speculation fueled by inevitability: Where will these guys get more dough to stay afloat long enough to execute their radical makeovers?"

Case In Point 1: Chrysler Taps $2 Billion Credit Line

Case In Point 2: Ford Unloading Volvo?

Case In Point 3: GM Plans Bake Sale

Okay, I goofed you on the last one, but this is actually deadly serious business. Cash is flowing like a river, but unfortunately it is going the wrong way. The linked article above discusses some additional options: GM could pledge its assets and Ford could get a cash injection from Captain Kirk (Kerkorian).

It really is tough out there. Bond ratings are getting kicked in the teeth. Stock prices cratering to levels not seen in decades. As I mentioned in a previous post, when the pillars of your pro forma start to crumble then you have to scramble to stop Excel from turning your monitor blood red. Imagine your household budget and then take your income stream and slash it to bits. I don't care how many more copies Ford is selling of its Focus model, the profits are nowhere near what their now passé trucks were hauling in. There have been enough boom and bust cycles that this should not have happened. Our domestic manufacturers should not have let the fox into the car hen house while everyone else was in the barn with the big trucks. History repeats itself. History repeats itself. Sadly, this time around I'm not totally convinced that all three of our manufacturers are going to live to die another day.

Having said all of that, I don't want our nation lose any of its automotive diversity. I hope that each manufacturer uses the extra time afforded by these lifelines to field product lineups that are in sync with the times.