GM Reports Heavy Losses in the First Quarter

The largest U.S.-based automaker also said Thursday it spent $10.2 billion more cash than it took in from January through March, mainly because revenue dropped by a staggering $20 billion, or 47 percent.

GM's loss for the quarter was offset by $9.4 billion in government loans GM received in the first quarter. GM got another $2 billion in April, bringing total government loans to $15.4 billion.

GM CFO Ray Young said talk of the company going into Chapter 11 bankruptcy protection appeared to have scared some consumers away from buying GM vehicles.

"The concern about bankruptcy is having an impact on our sales," Young told reporters Thursday morning.

Young also said because a U.S. government guarantee of GM and Chrysler warranties was not revealed by the Obama administration until March 30, for most of the quarter consumers were unsure about warranty protection. Chrysler last week filed for bankruptcy protection.

"We cannot cut costs fast enough to offset that revenue loss," Ryan said. "People are concerned about bankruptcy, and that's the reason why we want to avoid it if at all possible."

Before the June 1 deadline, GM must get a new cost-cutting agreement with its unions, complete a debt-for-stock swap with 90 percent of its bondholders, close factories and cut jobs to prove to the government it can repay the loans. It is also trying to cut 2,600 dealerships and is in the process of selling or phasing out the Saturn, Saab and Hummer brands. GM has already decided to get rid of Pontiac.

GM has made an offer to the holders of roughly $27 billion in debt to swap 225 shares of stock for every $1,000 GM owes. The deadline for the swap is May 26, and Young would not comment when asked if the offer might change.

Young said GM was back in talks with union representatives this week and was ready to negotiate around the clock to reach a settlement.

The UAW faces pressure to accept GM stock in exchange for about $10 billion the union is owed for a trust fund for retiree healthcare. That would give the union a 39 percent stake in the restructured company.

Under the restructuring plan GM detailed last month, the government would own a majority stake, effectively nationalizing the 100-year-old Detroit-based automaker. The Obama administration ousted Rick Wagoner as GM chief executive at the end of the quarter.