GM Auditors Raise Warning On Bankruptcy Risk
NPR.org, March 5, 2009 · General Motors Corp. is quickly running out of cash and faces possible bankruptcy if it can't execute its restructuring plan, despite government efforts so far to rescue the troubled automaker, the company's auditors said Thursday.
"The corporation's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern," auditors Deloitte & Touche LLP wrote in an annual report.
Although GM has warned for weeks that its cash-flow position was being eroded, Thursday's announcement in an annual report filed with the U.S. Securities and Exchange Commission shows the full gravity of the situation as auto sales plummet to their lowest levels in more than a quarter century and revenue continues to drop sharply.
GM has already taken $13.4 billion in government loans, but the company has been unable to cut costs fast enough to stop the bleeding. Executives say they need another $16 billion to survive.