General Motors Corp said on Thursday it expects auditors to cast doubt on the automaker’s ability to remain viable as it endures the worst market in decades.
GM posted a deeper-than-expected quarterly loss as revenue plunged by more than a third. The automaker also warned its pension plans for hourly and salaried workers were underfunded by about $12.4 billion as of the end of 2008.
GM said it could receive a “going concern” notice from auditors, who will assess the risk that the automaker might not be able to continue as a going concern.
The company, which has been kept afloat with emergency loans from the US government since the start of the year, posted a net loss of $30.9 billion for 2008. That ranked as the second largest annual loss for the 100-year-old automaker on record behind only the $38.7 billion loss recorded for 2007.
During the fourth quarter, GM burned through $6.2 billion in cash and ended December with $14 billion in cash and liquidity including the first $4 billion in loans received from the US Treasury. GM’s fourth-quarter net loss widened to $9.6 billion from $722 million.
Excluding one-time items, GM’s quarterly loss $9.65 cents per share. Analysts surveyed by Reuters Estimates had forecast a loss per share of $7.40 on that adjusted basis. Revenue for the quarter fell to $30.8 billion from $46.8 billion.
GM Chief Financial Officer Ray Young said the deep loss for the quarter reflected how a slump in auto sales that began in the US market had become a global crisis by year end. “When we talk about contagion, what we saw was that the credit crisis was starting to spread,” Young told reporters on a conference call.
Analysts have said the key to valuing GM’s shares and debt is the progress the company is making in crucial restructuring talks with creditors and the autos task force assembled by US President Barack Obama to slash debt and secure new funding.
The release of the company’s results come on the same day that GM chief executive Rick Wagoner was scheduled to meet with members of the task force headed by US Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers. GM has asked for a total of up to $30 billion in total aid from the US government to survive a plunge in sales in the global auto market. (Reuters)