GM touches near 54-year low

The automaker is expected to report dismal June sales as demand for full-size vehicles falls amid record high gas prices.

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By Ben Rooney, staff writer

If I lost my job today, I would have enough savings for:
  • 3-6 months
  • 6-12 months
  • At least one year
  • I don't have any savings

NEW YORK ( -- Shares of General Motors fell Monday, at one point trading at their lowest level since 1954, on the eve of what's expected to be a dismal report on June vehicle sales.

GM stock ended down 5 cents to $11.50 a share after hitting a low of $10.57 earlier in the session. That was the lowest level for the company's stock since Sept. 22, 1954, when it traded at $10.49 on a split-adjusted basis, according to data from the University of Chicago's Center for Research in Security Prices.

So far this year, shares of the nation's largest automaker have lost half their value.

Last week, GM (GM, Fortune 500) shares tumbled after Goldman Sachs analysts downgraded the company to "Sell" from "Neutral" and cut their six-month price target to $11 from $19.

The automaker is set to announce its June sales numbers Tuesday and the outlook is grim.

"People are expecting bad news," said David Healy, an auto industry analyst at Burnham Securities Inc.

"For the industry as a whole, we're expecting the weakest month in years," he said.

Sales of full-size vehicles like trucks and SUVs, which were GM's most profitable products until recently, have declined dramatically as gas prices have soared.

The national average price for a gallon of regular gas has reached an all-time high of $4.086, according to a daily survey by motorist group AAA released Monday.

In addition to falling demand for some of their flagship products, GM is also facing higher input costs as the price for raw materials like steel and other metals have risen.

What's more, labor disputes earlier this year have caused significant delays in GM's production schedule.

"People are beginning to realize the size of the losses they [GM] will take this year," Healy said.

But GM has plans to change its product line so that it can take advantage of rising demand for smaller, more fuel-efficient cars.

Eighteen of the nineteen new vehicles GM is working on will be cars or crossover SUVs. And the company is developing a plug-in hybrid vehicle, the Chevrolet Volt, that can run about 40 miles without any use of gasoline.

"They are adjusting their sales mix as quickly as the can, but in the meantime sales will be bad," Healy said.  To top of page

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