Here's a game for many players with a serious side to it. GM (amongst others) needs to avoid going bust in one big bang. Bust over the long run in the British Leyland (once the world's third largest car maker remember) style may be inevitable, but sudden failure and the consequences of that are unthinkable.

In June GM said that it had enough cash to last the year, no matter how bad the market became. In the third week of November it asked if it could have US$12bn. In the first week of December it raised that to US$18bn.

In the third week of December GM was given the first tranche of its allowance which is to be US$13.4bn.

Last week, Ron Gettellfinger, the President of the UAW, said to a news camera that GM's pocket money would probably be enough to see it through. The Financial Times did a version saying that GM also said that the money will be enough, although the source was not identified. GM swiftly told us that if anyone had said that, they weren't meant to.

The short term problem for GM is the top line revenue number. There is a lot else wrong, but wrongest of all just now is the fact that GM sales were down 31% in December while 23% down for the year. Toyota was down 15% for the year, so GM is dealing with inadequate competitiveness in a market where declines are still way above the year average.

Buried in the Q3 financial results from GM was the cash burn for the quarter. It was $4.8bn. That means the cash-burn run-rate was annualising at $19bn even before the demand crisis worsened in Q4. It would seem self-evident that GM will not be able to show sustainability to lenders and investors.

The reason GM needs our help is that it does not yet have any money at all that it can keep. The US Treasury loans of US$17.4bn total (to GM and Chrysler) are repayable in full on March 31 if the companies cannot show by then that they are financially viable. This proviso from the Republicans still needs definition of its terms. That will be a task for the Democrats when they take office on January 20. GM (and Chrysler) then have just six weeks to establish the proof that it is viable in all weathers to the satisfaction of President Obama and his Treasury team.

There are some new clues due from GM over the next few days which may give us some new prime numbers that will allow better adding up and taking away.

On Sunday and Monday, GM faces the press in formal Q&A sessions at the Detroit Auto Show.

Later on Monday, The UAW starts the 2009 wage and conditions negotiations with GM. What is put on the table may well become public information at the outset.

Detail is awaited with interest. In round numbers, the Big Three need to trim hourly pay from an average of around US$30 to nearer US$20 an hour to be competitive and therefore viable.

Now then....Rick Wagoner was on record yesterday saying that he expected the UAW to come up with concessions in wage rates to help with survival in the current crisis; and it was UAW boss Gettelfinger who said that GM now had enough money to see it through. Are we to assume that they are both talking about the same thing and that at last the ludicrous layer of UAW pay and legacy costs are to be surrendered to make the US Big Three competitive?

Calculators at the ready ladies and gentlemen: the next few days could be very interesting.
 
Rob Golding

'Goldie'