Based on GM’s last quarterly financial statement, the car company had $28 billion in payables. Most of those were to suppliers. If the firm is trying to hold onto its cash, that figure could be higher by $10 billion. There are rumors that GM is paying some of its parts companies six months after billing.

Bloomberg mentions today that certainly suppliers, worried about a Chapter 11 filing, are asking for cash on receipt.

According to the news agency "GM has rejected the requests for upfront payments, which so far have come from a fraction of its 3,600 suppliers."

What if GM does have $40 billion in payables and an ongoing sharp drop-off in monthly cash coming in due to faltering car sales? The firm wants $4 billion from the government immediately and $10 billion to operate to the end of the first quarter of next year.

Does that math seem odd? It is.

GM needs a lot more than it is asking for. Its payables will eat the first government check in a day and then the problem of remaining current with suppliers while catching up on old obligations will burn money for months. None of that has to do with capital needed to restructure GM.

Douglas A. McIntyre

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