Email List Sign Up

GM auditors raise doubts on automaker’s viability

Thursday, March 5, 2009

GM auditors raise doubts on automaker’s viability

Robert Snell / The Detroit News

DETROIT — General Motors Corp. says there is "substantial doubt" about the company’s ability to continue as a going concern, according to a regulatory filing today.

An independent audit done by GM’s accounting firm found "our recurring losses from operations, stockholders’ deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern," GM wrote in the filing.

GM signaled last week that it would receive a "going concern" opinion from its auditors.

The Detroit automaker almost ran out of money in December before winning commitments of up to $13.4 billion in federal loans. GM said last week it needs up to $16.6 billion more to survive the weakest sales market since the early 1980s, including $2 billion this month to avoid bankruptcy.

GM ended the year with $14 billion in cash, securities and readily available assets — about $3 billion more than the minimum amount it needs to pay bills.

The automaker, which has lost about $82 billion in recent years, is implementing a broad cost-cutting plan aimed at becoming a viable company and repaying the federal loans.

GM is eliminating 47,000 jobs this year, shuttering 14 plants by 2012 and selling, shrinking or killing its Saturn, Hummer, Pontiac and Saab brands. Saab filed for reorganization last Friday in the Swedish equivalent of a Chapter 11 bankruptcy.

GM also is forcing most of its U.S. salaried workers to accept temporary pay cuts.

The restructuring plan and the company’s viability hinge on higher sales volumes. U.S. vehicle sales have fallen 40 percent from the peak in 2007 and global sales have fallen 23.5 percent since January 2008.

GM expects sales to decline more this year before starting to recover in 2010.

"Sales volumes may decline more severely or take longer to recover than we expect, however, and if they do, our results of operations and financial condition and the success of the Viability Plan will be materially adversely affected," GM wrote in the filing.

More GM news

Track GM's stock
Seniority Lists
Recent Posts!
Bargaining Committee

Mike Herron
Tim Stannard
Zone at Large – 1st
Danny Taylor
Zone at Large – 2nd
Mark Wilkerson
Joe McClure
Chad Poynor
Steve Roberts
Derek Lewis
Bill Cundiff
Kirk Zebbs
Don Numinen
Jay Minella
Danny Bragg
Chris Hill
Rashad Thomas
Keith Oswald
Chris Brown

1853 Officers

Tim Stannard
Mike Herron
Vice President
Darrell DeJean
Financial Secretary
Mark Wunderlin
Recording Secretary
Peggy Mullins
Trustee (3)
Jay Lowe
Dave Clements
Dave Spare
Sgt. at Arms
David C Spare
Ashley Holloway
E-Board at Large (2)
David Ryder
Steve Roberts

GM Unit Chair
Mike Herron
Leadec Unit Chair
Larry Poole
Ryder Unit Chair
Patrick Linck
AFV Unit Chair
Katherine McGaw
Retiree Chair
Mike Martinez

Get Text Alerts


*Standard text messaging rates may apply from your carrier