Big Three face big risks in turnarounds

DETROIT, Aug. 6 (UPI) -- All three U.S. auto giants face the possibility of bankruptcy as they adapt to current consumer trends favoring smaller vehicles, industry analysts said.

General Motors Corp. reported a $15.5 billion net loss in the second quarter, which ate up $3.6 billion of its available cash, CNNMoney.com reported Wednesday.

GM has about $26 billion in cash and credit available, while Ford Motor Co., has about $38.2 billion, the report said. Chrysler had about $9.4 billion in unrestricted funds at the end of the quarter, the report said.

Shelly Lombard, an analyst for GimmeCredit, said GM had "four or five quarters to get their act together."

As consumers turn toward fuel-efficiency, the Big Three are watching their more profitable large vehicle segments decline. But turning things around to a focus on small car production could take years, analysts said.

The chances of bankruptcy "are uncomfortably high," Bob Schnorbus, chief economist with J.D. Power & Associates told CNNMoney.

Bankruptcy would cut two ways. By filing for Chapter 11, a company can still operate and cut costs considerably while it reorganizes.

At the same time, bankruptcy risks losing large numbers of customers, wary the company would not be able to make good on service plans, analysts said.