GM: 'Substantial doubt' about continuing

[Rob]

GM: 'Substantial doubt' about continuing

Automaker's annual report says it hopes to get $7.7 billion from the government to remain viable.

By Ben Rooney, CNNMoney.com staff writer
March 5, 2009: 6:51 AM ET

NEW YORK (CNNMoney.com) -- General Motors Corp. said Thursday that it hopes to get additional loans from the government and that there is "substantial doubt" about the automaker's ability to remain a "going concern."

GM hopes to receive an additional $7.7 billion in federal aid, which would bring its total debt to the government to $30 billion by 2011, the company said in its annual report.

"The failure to obtain sufficient funding from the US government or governments outside the United States may require us to shrink or terminate operations or seek reorganization for certain subsidiaries outside the United States," the report said.

"If we fail to obtain sufficient funding for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief under the U.S. Bankruptcy Code," GM added.

Looking ahead, the company said it expects auto sales to remain weak. GM (GM, Fortune 500) said Tuesday sales fell 53% in February.

"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," the report said.

 

[Bob Chadwick]

"If we fail to obtain sufficient funding for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief under the U.S. Bankruptcy Code," GM added.

Got to love this ultimatum to the government.

 

[6 Shooter]

GM: 'Substantial doubt' about survival

Automaker pummeled by weakening demand and mounting losses discloses that its auditors have raised serious questions about its future.​

By Chris Isidore and Ben Rooney, CNNMoney.com staff writers
Last Updated: March 5, 2009: 12:30 PM ET

NEW YORK (CNNMoney.com) -- General Motors Corp. said in a government filing Thursday that its accounting firm has found there is "substantial doubt" about the automaker's ability to survive.

The embattled automaker made the disclosure in a 480-page filing with the Securities & Exchange Commission.

The filing's grim tone is not a surprise. GM has sustained large and continuing losses that have now reached $82 billion over the last four years. It had previously said it needed additional federal loans, coupled with improved sales, to remain in business.

GM said in a separate statement that it is confident it will be able to turn around the business if it gets the federal help it is seeking and when consumer demand for autos returns.

"The auditor's opinion has no impact on the aggressive actions we are taking to restructure our business for long-term viability," GM said.

CNNMoney.com Article

 

[Cruzen]

Sounds like maybe the "fat cats' at GM have read Lee Iacocca's autobiography where he explains how the government guarantee of loans to Chrysler was negotiated. Obviously they did not read the portions about downsizing and the impact bankruptcy would have on a car company but then they really don't care as they have more than enough money on which to retire.

Now, maybe they should read some of Iacocca's observations on the GM "fat cats".

By the way, I do not know how factual or accurate Iacocca's original autobiography written in 1984 is but you sure get a feeling of Deja Vu as he describes all the problems he found when he moved over to Chrysler. It's especially interesting to read his take on what happened to the automotive industry in the 1970's when the oil crisis hit.

It may be short, It may be long,
Either way, Enjoy the ride!
Denny

 

[Red Vette]

Chrysler was able to survive, but if you ever purchased one of their cars during the troubled period, you know you got some cheap OEM parts in the vehicle. Our LeBaron was always having problems. I was talking to the Attorney General of Co during the period and he said that Colorado purchased the Chrysler cars as fleet vehicles; they were major headaches. I hope GM survives, and does not have to discontinue corvette (as we all do on the latter comment).
Barrett

 

[NORTY]

I think what saved Chrysler back in the 1980's was their President (Iacocca) doing TV commercials and not lying about what was going on. (Or, at least not having the appearance of lying to the public.) Either way, it worked. They had to make hard choices such as selling the tank building division for $50 million...and the contract gauranteed a $50 million profit every year. That's how big a "money crunch" they were dealing with. Then, Chrysler made payments to the US Gov't and the gov't didn't know how to accept the payments! It seems no one had ever made a payment back to the gov't for a "Gov't backed loan." That's pathetic.hnoes

 

[killain]

Automobiles and Economics ?

I've been thinking about the dire situation that general Motors has found itself, and the one question that keeps coming back to me is"How'd they run out of money after being in business for over a hundred years? I mean look at say 'Lloyds of London' have been in business since 1688, that's 321 years in businesss. So how the heck can a company as sucessful as GM run out of money? And with it, the car we all love the corvette.

General Electric has been in business since 1896, so for whatever reason, GE has managed to weather 113 years and still be quite viable. While General Motors has managed to be so broke the government needs to step in and bail them out. It really upsets me that the management has done such a pathetic job and reward themselves so nicely. I really have to wonder if considering the worldwide depression we in if GM has the ability to make it very much farther. Truly upseting considering the Corvettes life is also on the line.ad

 

[njlouc]

I am sure that Nazi germany wasn't interested in sports BMW's at the time. If all you lose in this debacle is your vette of the future feel lucky. Turn off the TV news and CNN and look on the internet including this forum to find what's really going on. The way it looks the auto companies of the future will be state run. Green and saving of the globe will be the main issue. No pollution and no use of natural resources. Then US will have no manufacturing production since it requires resources. We will be unemployed and paid by the government. Those working will be some sales people selling foreign goods, gov't tax and welfare workers, and lawyers suing everyone in sight. Almost forgot - The 25 doctors left in the US will have to be supplemented by foreign doctors from Africa and other third world nations, where it is easier to get a degree. We will all be glad to see the "change".