GM Still Losing- The company has burned through cash at a rate of more than $1 billion a month. In the quarter ending in March, the burn rate was abo

The auto industry is in chaos -- fortunately for General Motors (GM, news, msgs).

• Gasoline above $4 a gallon in the U.S. has sent sales of trucks and SUVs plunging as drivers look for more mileage for their dollars.

• Higher steel prices have savaged profit margins.

• New competitors from India and China are about to emerge in the global market.

• And nobody knows what the future will bring -- electric cars, more hybrids, even cleaner diesels.

It's likely that the auto industry will look radically different in 2010 than it does today.

And that's what's likely to save GM. The company is bleeding market share in its home market because fewer motorists want to buy its North American product line of trucks and SUVs. And its losses are so huge that in the past couple of months the company has burned through cash at a rate of more than $1 billion a month. In the quarter ending in March, the burn rate was about $500 million a month.

But whatever its current troubles, the company isn't shut out of the future of the global auto industry. So much change is sweeping across the global marketplace, nobody -- not even Toyota Motor (TM, news, msgs) -- will be able to lock up the market and turn GM into a permanent also-ran. There's so much uncertainty about demand trends and developing technology that even a player as currently challenged as General Motors could grab the brass ring if it makes the right decisions on what cars to produce and what technologies to back.

• Talk back: Can GM overcome its huge problems?

And amazingly, given all the talk about the death of General Motors, the company has a better chance of grabbing that prize than almost any car company in world except for Toyota. If GM can get to 2010 with a few dollars left in its gas tank, that is.

Market weakest where GM is strongest

How bad are things at General Motors? The company showed a $4.4 billion operating loss in 2007, the fourth operating loss in the past four years. Cash flow for the year was a negative $5.6 billion. The company finished the year with $25 billion in cash, about flat with 2006 but down a huge $24 billion from the end of 2005.

Then everything got worse. After averaging 16.8 million units a year from 2000 through 2007, U.S. auto sales are on a pace to fall to just 14 million units in 2008. The hardest-hit segments are exactly where General Motors' sales are strongest. Industrywide, sales of pickups, SUVs and vans -- exactly the kinds of vehicles most affected by higher gasoline prices -- were down 21% in the first half of 2008 compared with a year ago. The company gets about 60% of its sales from these categories. The company's share of the U.S. market, which tumbled to 23.5% by the end of 2007, has declined further, to just 21%.

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And the recovery in U.S. auto sales is getting further and further away. First projected for the end of 2008, as the economic slowdown has dragged on and as oil prices have shown no signs of a meaningful retreat, the recovery has receded into 2009. General Motors has recently started talking about 2010 as the year the auto market turns around and the company returns to profitability.

Losing cash, facing debt

Pushing off a recovery for an additional 18 months gets very scary when a company is burning through cash as fast as GM -- whether it's the $1 billion a month of the past couple of months or the $500 million a month of the March quarter.

Do the math: Eighteen months at $1 billion a month comes to $18 billion. General Motors finished the March quarter with $22 billion in cash. The current rate of cash burn would cut that to just $4 billion by the start of 2010. That's cutting it a little close for a company with $34 billion in long-term debt.