11 Oct 2008

GM shares fall to lowest level since 1950

1:07 pm on 11 October 2008

General Motors says it is not considering bankruptcy protection despite slow car sales and the credit crunch, which have sent its shares fall to near 60 year lows.

It shares have plunged by 31% to their lowest level since 1950 after the company reported a 1.9% fall in European sales for the first nine months of the year. US sales are also down.

GM shares fell as low as $US5.42 on the New York Stock Exchange.

It blamed the credit crisis and inflation for hurting consumer confidence in Europe.

GM posted a $US15.5 billion net loss in the second quarter and announced plans in July to cut costs by about $10 billion.

The company has been restructuring in North America to meet increasing demand for more fuel-efficient vehicles.

Major car companies last week reported a 26% drop in overall US sales for September. US auto sales have fallen nearly 13% in the first nine months of 2008.

Meanwhile, Ford Motor Co, which has also seen its shares plummet, has announced that the chief financial officer, who was the architect of a crucial 2006 borrowing programme, is retiring.