US: GM And Ford Hemorrhaging Money

Reports released Friday indicate that US motor giants General Motors and Ford are hemorrhaging money at an alarming rate, as they become two of the companies hardest hit as the world's largest economy goes down the toilet.

GM reported a larger-than-expected loss of $4.2 billion in the third quarter on Friday. The company's revenue in the third quarter fell 13 percent, to $37.9 billion from $43.7 billion a year ago, because of weak demand in its core North American and European markets, it said.

The company also reported that it burned through $6.9 billion in cash during the quarter and ended the period with just $16.2 billion in cash reserves. That leaves the company just enough to see it through to the new year.

The motor giant admitted it "will fall significantly short" of the cash needed to run its business in the first half of 2009 unless economic conditions improve and the company gets aid from the federal government.

Earlier Friday, Ford Motors said it burned through $7.7 billion in cash in the third quarter, leaving it with $18.9 billion at the end of September. It reported a loss of $2.9 billion in the third quarter.

The CEO's of Ford, GM and Chrysler met with government representatives last week to discuss an emergency loan package, believed to be as much as $25 billion, to help the companies get through the worst vehicle market in 15 years and avoid going into bankruptcy protection.