General Motors takes a $6 billion hit – bankruptcy looming?

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GM has reported a loss of $6 billion in its latest figures. The first quarter results are out and its revenues have been reduced by half. It spent $10.2 billion more and the losses were compounded because of the 47% loss in revenues amounted to an enormous $20 billion.

The beleaguered company has till June 1 to decide whether it will be forced to file for bankruptcy because that is deadline given by the U.S. government. It needs $20 billion to be able to meet its expenses. It is in a race against time to cuts costs, and debt to avoid the looming prospect of bankruptcy.

It will have to restructure, cut jobs, close factories, cut 2,600 dealerships, phase out its Saturn, Saab and Hummer brands – it has already got rid of Pontiac.

Though it is looking for a federal bailout by the U.S. government, one does not seem to be in the offing and its Canada outfit is also looking at liquidation. Rick Wagoner, CEO of GM, said“We’re going to have to work very hard, do all the self-help we can, and we’re going to find a way to get through this.

Hopefully the government will be willing to provide the support we need along with all the work we’re doing.” Brave words, but the fact is that GM is already preparing for bankruptcy should nothing else work out.