General Motors independent auditor said yesterday that there is “substantial doubt” about the company’s viability plan, outlining a number of scenarios that could lead to a Chapter 11 bankruptcy filing.
GM is currently waiting on hearing back from the government on a request of up to $16.6 billion in federal aid. Top executives said yesterday that if GM doesn’t receive $2 billion by the end of this month, it will run out of cash. They said the company needs another $2.6 billion in April to stay afloat.
The auditor rating of “substantial doubt” has led to some very scary headlines for GM, but the executives are talking back. CFO Ray Young said that GM is very carefully monitoring its global liquidity. The Detroit automaker lost $30.9 billion last year and ended 2008 with $14 billion in cash. That is about $3 billion more it needed to pay all of its bills.
Young said that the U.S. Treasury has not hinted on whether they will provide additional funding.
Steve Rattner and Ron Bloom, advisers to Obama’s auto task force will be heading to Detroit on Monday to meet with GM, Ford and Chrysler executives. The two will have a hand in helping the U.S. Treasury decide whether GM and Chrysler should get another $21.6 billion in aid.
Yesterday, Steve Harris, Vice President of Global Communications, also wrote on GM’s Fast Lane Blog about the matter. You should read it if you’re interested in GM’s future.
Source: Detroit News