General Motors posted a $9.6 billion fourth-quarter loss and said it burned through $6.2 billion of cash in the last three months of 2008 as it fought the worst U.S. auto sales climate since 1982 and sought government loans to keep the century-old company running.The nation’s biggest domestic automaker said Thursday it lost $30.9 billion for the full year and expects to state in its upcoming annual report whether its auditors believe the company remains a “going concern.” GM and its auditors must determine whether there is substantial doubt about the automaker’s ability to continue its operations. GM burned through $84.7 million a day in 2008.
Chief Financial Officer Ray Young said the determination will depend a lot on whether GM gets further government loans and whether it can accomplish its restructuring goals.
Young said that auditors are studying the future of the company because “there’s uncertainty with how the Treasury will view our viability plan,” and “uncertainty on whether we’re going to be able to execute the terms of our loan agreement.”Rival automaker Ford, which has not sought U.S. government emergency aid, said Thursday it has adequate liquidity amid worsening industry conditions and has no doubt about its ability to continue as a going concern.
GM received $13.4 billion in federal loans since Dec. 31 and says it needs up to $30 billion to stay out of Chapter 11 bankruptcy protection. Top GM executives were in Washington, D.C., Thursday to meet with the Obama administration’s auto task force to talk about restructuring and additional loans.
“2008 was an extremely difficult year for the U.S. and global auto markets, especially the second half,” Chairman and CEO Rick Wagoner said in a statement. “These conditions created a very challenging environment for GM and other automakers and led us to take further aggressive and difficult measures to restructure our business.”
Young said GM would reduce its structural costs by another $4.5 billion in 2009, from $30.8 billion to $26.3 billion.
GM’s adjusted cash burn for the year in 2008 was $19.2 billion, but Young expects that to fall to $14 billion in 2009 as the company cuts structural costs.
The company still will need more government help, he said, because GM expects the entire auto industry to sell a dismal 10.5 million vehicles in the U.S. this year.
Most of the cash burn this year can be attributed to the temporary shutdown of many GM plants during the month of January, he said.
“We’re not pleased with a negative $14 billion cash flow burn, that’s still a very, very sizeable amount,” he said, “but at the same time we recognize that the industry conditions in ’09 are going to remain fairly challenging.”
GM reported a net loss of $15.71 per share for the fourth quarter, compared with a loss of $722 million, or $1.28 per share in the year-ago period.