"Domestic manufacturers have had an excess capacity problem, and they've been having a price war to keep volume up and protect share," Guziec said. " Ford ( F) has been more aggressively conceding share and shrinking. GM may be coming up against the point where they have to do that. I don't think that will force bankruptcy, but if this continues, they'll have to continue to shrink down to a more appropriate size." GM's chief financial officer, John Devine, recently responded harshly to any mention of the "B-word," which has surfaced repeatedly in reference to GM lately, saying "the idea of bankruptcy is nuts." "I think there's going to be a restructuring of North American operations with an aggressive cost-cutting program coming that will involve closing more plants and laying off more people," said Burnham Securities analyst David Healy. "They may even go back to the unions and try to get concessions on health care and other costs." GM's previous first-quarter earnings guidance was based on North American vehicle production of 1.25 million. Since then, production schedules have been reduced by about 70,000 vehicles and pricing has become more competitive in North America. GM also expects negative operating cash flow in 2005 of approximately $2 billion before charges related to its settlement with Fiat and the restructuring of its European division. It had previously targeted positive cash flow of $2 billion. The revision is primarily attributable to lower volume and decreased net income at GM North America. Meanwhile, the company swims in a swamp of rising steel and fuel costs, shifting consumer attitudes and soaring legacy costs for pension and health care requirements that add a reported $1,850 to the cost of every vehicle made. Its $50 billion of corporate debt is currently rated at BBB- at Standard & Poor's, the agency's lowest investment grade level. Its debt is the second-largest component of the Lehman Brothers corporate bond index behind Ford.