Auditors give GM substantial doubt, GM talks back

Posted: Mar 06, 2009
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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


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  • zermatt

    As we reach the close of the NYSE today, Ford looks to be heading to a close that will be higher than GM.

    The statements on GM's financial picture are taking their toll on the stock price.

    In the WSJ today it is reported that GM is considering government assisted chapter 11 bankruptcy as the direction to take.

    In the European press today, German government officials are saying that funding a bailout of Opel is not prudent and that the proposed selling of a portion of Opel is a non starter. German officials are also P.O.'d with GM for putting Opel's patents up as collateral for the U.S. backed loans.

    I would expect that following GM's meeting with the governent next week that they will be announcing a bankruptcy plan.

  • Pat

    These guys have to be kidding. Honestly what plan do they really have? I've been saying it over and over again..they've known for a while they were headed down this road. WHY spend time on cars like the Volt that won't make money…why not build cars like the Honda Insight Hybrid which is selling out like nuts for Honda. Why are they still making the Cadillac CTS Coupe or the Cadillac SRX …. (i will not mention the Camaro cuz i love it!)

  • GMfan87

    I agree that nothing they have will save them. But in defense of the volt, it is a great investment (key word investment) in my opinion. It WILL sell when it comes out and eventually it will become profitable. it helps GM's “green” image tremendously, something they completely lacked 5 years ago. The SRX sells decently among the luxury crossovers (granted not nearly as well as the lexus rx) and it has gotten amazing reviews. The next gen is going to be even better with the turbo v6 or regular v6 from the cts and its gorgeous style. As for the CTS coupe, another great investment IMHO. How many 4 door G35/G37's do you see on the road compared to the coupes? I also agree completey on the camaro, its going to be awesome!

  • Bobmarley

    you called it zermatt…they will be anouncing bankruptcy in the next week or two

  • Bobmarley

    you called it zermatt…they will be anouncing bankruptcy in the next week or two