Carnage for car makers as panicking investors send US shares into reverse

Panicking investors are dumping shares in America’s biggest car manufacturers, amid suggestions that collapsing sales could push them to the brink of bankruptcy.

General Motors, the world’s biggest car maker and producer of American icons such as the Chevrolet, the Cadillac and the Hummer, saw its shares plunge to the levels of more than 50 years ago, after a Wall Street analyst predicted it would need to raise emergency cash from shareholders to stave off insolvency.

And in the skittish atmosphere, Chrysler, which is owned by the private equity firm Cerberus Capital but whose bonds trade on the financial markets, felt it necessary to deny rumours circulating in Europe that it had already begun considering plans to seek bankruptcy protection.

With renewed gloom over the economy, due to weakening consumer confidence and rising food and fuel bills, and fears of more losses in the financial sector due to the credit crisis, the Dow Jones Industrial Average slumped 358 points – or 3 per cent – to 11.453.4, having accelerated lower through the afternoon.

Read more

Leave a Reply