General Motors says it is in such a bad state that it will need US government help soon. GM’s chief executive Rick Wagoner has said it needs to line up a federal aid package before president-elect Barack Obama takes office in January.
On Tuesday, the company’s shares plunged further, to their lowest level in 65 years after a Deutsche Bank analyst said they could be worthless in a year. GM is running our of cash – its sales in the US were down 45 percent in October and 21 percent in the last quarter.
While government aid would decrease the risk of a bankruptcy, analysts have warned that any assistance would come at a significant cost to existing shareholders. The White House said it was open to considering any proposals from Congress to accelerate loans to the ailing US car industry from an already-appropriated package.