Just a few days after I suggested that GM would require more money than they're currently asking for, comes this story of a "higher than expected " Q4 loss of $9.6 billion.
(From The Financial Times): " General Motors on Thursday said it expected its auditors to study whether there was “substantial doubt” it could continue as a going concern, as the US carmaker revealed a full-year net loss of $30.9bn
It said it expected the auditors to give their opinion when the GM files its annual report with the Securities and Exchange Commission next month, since the company plans to take advantage of a 15-day extension to the deadline for filing.
The top executives at America’s largest carmaker are due to meet later on Thursday with an auto industry task force headed by Timothy Geithner, US Treasury secretary, and Larry Summers, President Barack Obama’s chief economic adviser, to discuss their request for more aid.
The company is seeking to avoid a bankruptcy filing on grounds that its failure would put hundreds of thousands of jobs at its suppliers at risk.
GM, which made a larger-than-expected $9.6bn net loss for the fourth quarter, is surviving thanks to a $13.4bn US government emergency bridge loan. It burned through $5.2bn in the fourth quarter and confirmed that its cash holding had fallen to $14bn as of end-December – it has said it needs a minimum of $11bn to $14bn to stay in business.
“GM and its auditors must determine whether there is substantial doubt about GM’s ability to continue as a going concern... GM requires (funding from governments) in 2009 to continue operations until global automotive sales recover and its restructuring actions generate benefits, resulting in the company being able to fund its own operating requirements,” it said in a statement .
In a report to the Treasury last week, GM asked for up to $16.6bn of additional emergency government aid, saying that auto demand and credit market conditions had deteriorated in the two months since its initial bail-out request.
It projected that because of “tough industry conditions” it would burn through $14bn of cash this year.
GM says it needs $2bn of bail-out funds in March and another $2.6bn in April to stay in business…
...GM lost money in all of its global regions in the last quarter.
