GM shares decline to 60-year low

Shares in US car group General Motors (GM) have closed at a 60-year low after the firm was hit by a broker downgrade.

The 23% fall to $3.36 came after Barclays Capital said the stock may slump as low as $1 as GM continues to struggle to turnaround its fortunes.

The broker downgrade came as GM announced a further 1,900 North American job cuts on top of the 3,600 it unveiled on Friday.

Like most carmakers, GM has seen sales fall sharply in its home market.

Government support

On Friday the firm also had to report a $4.2bn (£2.7bn) quarterly loss.

At the start of October, President George W Bush signed legislation that gives GM and fellow US carmakers Chrysler and Ford access to $25bn (£14bn) of cheap government-backed loans to help them develop less polluting cars.

Barclays Capital said GM may need extra federal funds.

GM also said on Monday that it was unsure the mortgage arm of its GMAC financial arm could survive. Like other US home loan providers, it has been greatly affected by a big rise in bad debt.

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