AP source: GM could announce production cuts soon

The person, who did not want to be identified because the plans are not finalized, said the cuts likely will hit engine, transmission and stamping operations to correspond with a June announcement that GM would close four truck and sport utility vehicle assembly plants.

The closures of those assembly plants likely will be accelerated, the person said. GM announced last week that its Moraine, Ohio, SUV factory will close Dec. 23, and it has said it will idle assembly factories in Oshawa, Ontario; Toluca, Mexico; and Janesville, Wis., by 2010.

Chairman and CEO Rick Wagoner said last month that GM would have to make adjustments, particularly in metal stamping factories.

Further cuts could shore up GM's share price, which lost nearly half its value this week, plunging to the lowest level in 59 years. The shares fell 31 percent to $4.76 Thursday and dropped to $4 in the first minutes of trading Friday, the lowest level since Nov. 16, 1949, according to the Center for Research in Security Prices at the University of Chicago. They rebounded to end six straight losing sessions and close at $4.89, up 13 cents, or 2.7 percent.

Industry analysts say closing factories or cutting shifts will help GM reduce costs and preserve cash at a critical time with the company losing billions and burning up cash at an alarming rate.

GM had $21 billion in cash and $5 billion available through credit lines at the end of June for total liquidity of $26 billion but has been burning up cash at a pace of more than $1 billion a month.

The company announced a plan in July that calls for cutting $10 billion in costs and raising another $5 billion through asset sales and borrowing through 2009.

Mark Warnsman, an auto analyst with Calyon Securities, said further production cuts are consistent with what GM and other automakers have been doing all year--cutting factory capacity to match lower sales.

"I think it's a positive sign that GM is biting the bullet," he said. "For GM going forward, they're going to have to use everything available to them."