General Motors has had a very bad week. It announced at the beginning of the week that it was looking to get $500 million by mortgaging its swanky Renaissance Center headquarters in Detroit to help raise it’s cash. But that’s now a small concern compared to its new problem. Yesterday’s stock firesale on Wall Street sent GM’s share tumbling to $4.76, which is a 31 percent loss in one day. The stock is now at its lowest price since 1950.
All of this sent credit rater Standard & Poor’s to say on Thursday it could cut both GM and Ford’s credit ratings deeper into junk. It said that both automakers had enough liquidity through 2008, "but the accelerating deteriorating industry fundamentals will be a serious challenge to liquidity during 2009."
But the battle is not over. General Motors sees a tough road but won’t go to the extreme of filing for bankruptcy. "Clearly we face unprecedented challenges related to uncertainty in the financial markets globally and weakening economic fundamentals in many key markets," GM said. "But bankruptcy protection is not an option GM is considering. Bankruptcy would not be in the interests of our employees, stockholders, suppliers or customers."
Just remember the infamous saying: “As goes GM, so goes the country.” So let’s all keep fighting.