Nov 07, 2008 - 12:59 PM

By Parvaneh Pessian

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OSHAWA -- General Motors lost $2.5 billion in the third quarter, says a GM financial report released Friday morning.

The results reflect the unprecedented turmoil in the global credit markets that has resulted in the worst financial crisis in more than 70 years, officials say.

"The third quarter was especially challenging for the auto industry," said GM chairman Rick Wagoner. "Consumer spending, which represents close to 70 per cent of the U.S. economy, fell dramatically, and the abrupt closure of credit markets created a downward spiral in vehicle sales."

The report also warns that the automaker's liquidity in 2008 "will approach the minimum amount necessary to operate its business."

Oshawa Mayor John Gray said he is deeply concerned about the health of the automotive sector and is alarmed to see automakers like GM and Ford plowing through their cash reserves.

"It really speaks to the need for loan guarantees to get them through this rough period until the economy rebounds," he said. "The manufacturers are doing what they need to do, they're focusing on innovating their products to respond to changing needs but you can't just throw the switch. It takes years to develop these things."

The company sent a memo to its executives Wednesday, saying employees would be informed of "important changes" underway to address challenging conditions facing the auto maker. The e-mail didn't specify what the changes would be, but executives hinted last month that more job cuts were on the way.

A conference call with vice-president and chief financial officer Ray G. Young was held at noon to review the company's results. The call will also address the updated liquidity analysis and improvement initiatives, and include a question-and-answer session with financial analysts and media.

No word yet on the impact the news will have on the Oshawa plant, but Canadian Auto Workers Local 222 president Chris Buckley is now on-site meeting with local officials and will be available for comment after the conference.

Check newsdurhamregion.com for updated information and further details as they become available.