The filing of bankruptcy by General Motors is due to GM's losses which were $30.9 billion for 2008 and $82 billion spread over the last four years. the company's dwindling net worth and its inability towards producing the cash necessary to conduct business, her auditors (Deloitte & Touche) remarked that without billions in aid in federal loans there was "substantial doubt" GM could "continue as a going concern."

This announcement led to a sharp decline in the prices of GM's stock which came down from $43 to less than $1 within 16 months. The capital is around $1 billion. The auditors further remarked that the equity is worthless even if the company managed to get finanacial aid from the government.

This debacle is due to several factors. First the company was spread over too much. They pledged to cut 47000 jobs to curtail themselves and close several divisions. Now they will be focussing only on automobile manufacturing. Don't think that the company is being wound up. They will continue to produce cars, customer support and maintenance programs are still going and so are their core future plans.

The cost of supporting so much work force was simply too much in this time of global recession. In the USA, GM sales have fallen to 13 million in 2008 and are expected to be around 9 million this year. China local sales were greater than USA sales for the first time this year.