GM is running on fumes

GM's future looks bleak

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NEW YORK (CNNMoney.com) -- General Motors will soon give more details about how close it came to running out of cash at the end of last year.

More importantly, it may give federal officials overseeing a bailout of the company a better idea of how much more cash it will need to stay out of bankruptcy and by when it must get it.

GM will report its fourth quarter results Thursday morning, and analysts surveyed by Thomson Reuters forecast that the company's net loss hit $4.2 billion, or $7.40 a share.

If analysts' estimates are right, GM (GM, Fortune 500) will have reported net losses over the past four years of about $78 billion.

But analysts and regulators may be far more interested in how much cash GM burned during the quarter.

The company's auto operations burned through $6.9 billion in the third quarter, leaving it with only $16.2 billion of cash heading into the fourth quarter. That set off alarm bells since GM has said it needs a minimum of $11 billion to $14 billion to conduct operations.

Automakers typically burn through a healthy chunk of cash during the third quarter since that is when they change production to a new model year.

But sales at GM and across the industry went from bad to worse in the fourth quarter, putting more pressure on dwindling cash reserves.

GM got $9.4 billion of a $13.4 billion loan from the federal government in the fourth quarter's closing days, saving it from a bankruptcy filing.

While the company has given updates on its operations several times since the third quarter results, most notably in two turnaround plans it submitted to the federal government, it has yet to detail how much it lost and how much cash it went through in the fourth quarter.

However, GM warned in its most recent viability plan that it expects to burn through $13.3 billion in the first quarter of this year.

That is one reason that GM is asking the federal government for an additional $16.6 billion in loans through 2011, while privately held Chrysler is asking for $5 billion more. Chrysler has indicated it needs the money by the end of the quarter but GM has been less clear about the immediacy of its cash need.

How quickly GM may need new loans could come into better view Tuesday once it and other automakers report February sales and give their outlook for the year ahead.

Industrywide sales plunged 37% in January to a 26-year low, and it looks like there was little improvement in February.

Jesse Toprak, industry analyst with sales tracker Edmunds.com expects that February sales plunged 40% from a year ago. Sales should be slightly above the January total, however.

"Things aren't getting any better, although they're not getting much worse from the worst month in decades," he said, adding that he's not expecting sales to pick up from current levels until the economy starts to stabilize, perhaps in July or August.

"We talk about the problems GM and Chrysler. But no one is immune from what's going on," he said. "Even the most financially healthy company like Toyota (TM) is suffering."

GM is now forecasting 2009 sales of just over 10 million cars and light trucks, down 1.5 million vehicles from its estimate in early December. Chrysler also recently cut its 2009 sales projection to 10.1 million.

Edmunds, as well as research firms J.D. Power & Associates and R.L. Polk, also have sales estimates in the 10 million range for the year. And if those grim forecasts are accurate -- or turn out to be too optimistic -- then GM, Chrysler and Ford Motor (F, Fortune 500) will keep losing money for the foreseeable future.