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General Motors announces need for government bailout in 2009

The US's biggest car manufacturer has stunned the market with news that in your absence of significant asset sales over the next few months the company is likely to run short of cash and require a government bailout of sorts. This shocking news came as GM announced third-quarter results which showed a loss of $4.2 billion compared to $1.6 billion just 12 months earlier.

While it is no surprise that the car market around the world is struggling many had thought the company's $20 billion cost savings initiative set to kick in next year would be sufficient to see it through to the upturn. However, it now appears that liquidity is set to fall to such a level as to put the group in serious danger of going under although bearing in mind the potential knock-on effect to the US economy this is something which the government cannot allow to happen.

This news will surely set the tone for car manufacturing markets around the world and comes hot on the heels of news that UK sales have literally collapsed to levels not seen for many years. Hopes of a bank led bailout for some the larger car manufacturers around the world appear remote and we could see further government handouts to ensure there is no other pressure on economies.

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