GM's 'Revenue Implosion' Blows Hole In Q1 Results

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When you burn through $113 million every day, it seems ludicrous to say that the quarter turned out a little better than expected.

Equally disturbing is the fact few will seem phased by the fact spent $113 Million more than it took in every single day of the first quarter.

That is the strange world of General Motorsthese days.

We've gone from being shocked about the losses at GM to being almost resigned to seeing outrageously large numbers. That says as much about the wounded auto maker as it does about the sad state of the auto industry.

Yes, GM losing $5.9 Billion (excluding special charges) of $9.66 for the first quarter is slightly better than Wall Street expected. So is revenue of $22.4 Billion (down 47%). Even GM burning through $10.2 Billion in cash is a better (or should we say not as bad) as the company projected back in February. Still, the staggering losses and negative cash flow reinforce how weak GM has become and why the federal government is propping this company up with billions in aid.

This is why critics argue GM should not be aided at all by Uncle Sam. They believe GM should have been sent into bankruptcy a long time ago. As with Chrysler, I think that argument simplifies the ramifications of a GM bankruptcy. Heck, if these guys are in Chapter 11 at the end of this month, it will be a semi-controlled skid that will still carry the possibility of damaging the auto parts suppliers and manufacturing companies.

When I talked with GM CFO Ray Young on Squawk Box this morning I asked him if the company might modify its debt exchange offer.

Remember, GM bondholders, who lent $27 Billion to the auto maker, are not happy being offered only 10% equity stake in GM. They would like a modified debt exchange offer. Ray Young addressed that idea telling me, "If, and that is a conditional statement, if we were to make any modifications it would have to be very soon in order to have time for the process to unfold in the course of this month."

The fact is May 26th is when the fate of GM is likely going to be decided. That's the deadline for the debt exchange offer.

If it's rejected, I would expect GM to file for bankruptcy on May 27th.

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