How bad has it become at the once all-powerful General Motors?

It was only the other day that the company's embattled chief executive Rick Wagoner was dismissing rumors of bankruptcy, claiming that the company had $24 billion of the folding stuff and $7 billion in credit facilities. That didn't stop the analysts from warning that the company had to raise billions of dollars in cash to stay afloat.

And now, GM has announced the way it will raise the cash is by cutting thousands of jobs through retirements, early retirements, buyouts and attrition (no sackings, yet).

Let's be quite clear: this may be the last roll of the dice for what was once America's most powerful company and the question is whether the cuts go too far, or whether they go far enough. But then, when Wall Street analysts are saying that bankruptcy is "not impossible", what choice is there?

The most striking thing about this are the parallels with the broader economy. Both GM and the US economy are in the toilet, which is why both Barack Obama and John McCain have seized on it as evidence that the economy is in serious trouble.

So what exactly is the problem with GM? One way of looking at it is to say that high oil prices, combined with the subprime debacle, has stopped people buying its cars.

But Toyota has responded quickly to a fall off in demand by announcing it will make hybrid gas-electric vehicles and Volkswagen has announced it will open its first US plant since 1988.

Just further evidence of how bad things are now for GM.