GM posts $9.6B 4Q loss, burns through $6.2B cash
DETROIT — General Motors Corp. 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 biggest U.S. automaker said Thursday it lost $30.9 billion for the full year and expects an opinion from its auditors as to whether the company remains a "going concern" when its annual report is issued in March. That means the auditors will determine whether there is substantial doubt about the automaker's ability to continue operations.
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.
The company has received $13.4 billion in federal loans since Dec. 31 and says it needs up to $30 billion to stay out of bankruptcy. 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."
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.
Quarterly revenue fell 39 percent to $30.8 billion from $46.8 billion, as credit availability froze across the globe, and a lack of consumer confidence and fears of job losses kept people from buying vehicles.
Excluding special items, GM's fourth-quarter adjusted loss was $5.9 billion, or $9.65 per share.
That was worse than Wall Street expected. Analysts surveyed by Thomson Reuters predicted a quarterly loss of $7.40 per share on sales of $35.1 billion.
For the full year, the loss was $53.32 per share, the second-worst annual result in the company's history. The worst loss occurred in 2007, when GM lost $38.7 billion, or $68.45 per share, in 2007, due largely to charges for unused tax credits.
GM shares fell 22 cents, or 8.6 percent, to $2.33 in premarket activity.
Feb 27, 2009 at 3:18 a.m.
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It is horrific, but then we are asking for a restructuring, nothing like the monies given to the banks last fall with barely more than an invoice. There's no question that GM and Chrysler at least are going to look very different than they have, and within months.
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The SUB pay and unemployment is all going to be subject to the restructuring plans.
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It's stupid in a lot of ways that we've reached this point, because GM rode high on the proceeds of the housing boom (which provided the money for the SUV boom). But the contraction of the credit market wasn't something they created, and that's what is putting them in dire straits, not just collapsing sales. Meanwhile we're having a hard time deciding to actually get rid of the management of the financial institutions that caused the mess in the first place. At least GM is already announcing major white-collar cuts.
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The "let 'em fail" rallying cry, meanwhile, is mainly coming from Southern conservatives who represent states where there are non-union auto plants. These folks would like nothing better than to break the back of the UAW and the labor movement in this country, so I'm suspicious when I hear them talk this way.
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Remember, Paulson decided they had to punish someone, and they punished Lehman Brothers, and in hours (yes, hours) the global financial markets were in free-fall. Deciding to let GM fail means Janesvilles and indeed Flints all over the place. That doesn't really serve anyone's interest.
Feb 26, 2009 at 10:23 p.m.
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This is one of the most horrific looking balance sheets you will EVER find for a publicly traded company! It's beyond belief that we are bailing these guys out. They are so past bankrupt that it's ridiculous. It will be an endless bailout at the tax payers expense. No doubt the ultimate strategy is to bail them out to the point where they say we have "no other option" but to nationalize the industry. Do not kid yourself, everything is about nationalization as the ultimate goal now.
Feb 26, 2009 at 7:59 p.m.
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Apparently they think that they get your job because they lost theirs.
Feb 26, 2009 at 6:53 p.m.
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How long do the non-retired employees get sub pay...so they do get most of their pay(not just unemployment)?
Also, do the non-retired employees get their education paid for still..or do they lose that too?
Feb 26, 2009 at 6:35 p.m.
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????
Feb 26, 2009 at 6:23 p.m.
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After Sub dries up we are going to go get your jobs for less money because they want loyal and hard working people
Feb 26, 2009 at 5:23 p.m.
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what's going to happen when the sub-pay/unemployment wells run dry??
Feb 26, 2009 at 4:04 p.m.
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Great! Now more bailout money for the UAW and goverment jobs.
Feb 26, 2009 at 2:13 p.m.
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Pathetic.
Feb 26, 2009 at 8:56 a.m.
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Time to cut the cord let em fall I for one am sick of sticking my tax dollars into this dying pig. Rick Wagner needs to go and I'm sorry local 95 but what has your beloved union done for you lately ie: job banks. Plain and simple let em fail cause the current course is only taking us deeper. This country needs to learn how to be able to survive without the automakers. Quit putting our eggs in one basket.
Feb 26, 2009 at 7:48 a.m.
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But I am sure they have some money set aside to re-tool Janesville, because after all, they never said no to bringing a new product here.
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