GM auditors raise doubts on automaker’s viability
General Motors Corp.’s auditors have raised “substantial doubt” about
the troubled automaker’s ability to continue operations.
The company revealed the concerns, raised by the accounting firm
Deloitte & Touche LLP, in its annual report filed today.
GM has received $13.4 billion in federal loans as it tries to survive
the worst auto sales climate in 27 years. It is seeking a total of $30
billion from the government. During the past three years it has piled up
$82 billion in losses, including $30.9 billion in 2008.
GM says in its report that its auditors cited recurring losses from
operations, stockholders’ deficit and an inability to generate enough
cash to meet its obligations in raising substantial doubts about its
ability to continue as a going concern.
The company said in its filing that its future depends on successfully
executing the viability plan submitted to the government in February to
justify the loans.
“If we fail to do so for any reason, we would not be able to continue as
a going concern and could potentially be forced to seek relief through a
filing under the U.S. Bankruptcy Code,” GM said in the annual report,
filed with the U.S. Securities and Exchange Commission.
GM, the report said, is highly dependent on auto sales volume, which
dropped rapidly last year.
“There is no assurance that the global automobile market will recover or
that it will not suffer a significant further downturn,” the company wrote.