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GM drives to a loss of US$9.6b in Q4
By Jeff Green |
February 27, 2009, Friday
|
Print Edition
Print Edition
GENERAL Motors Corp, surviving on US$13.4 billion in United States aid, reported a US$9.6-billion fourth-quarter loss as Chief Executive Officer Rick Wagoner prepared to ask the Treasury for more cash to get through the year.
The deficit was US$15.71 a share, wider than the year-earlier net loss from continuing operations of US$1.5 billion, or US$2.70, GM said yesterday in a statement. The US$30.9 billion annual loss was the second-largest in GM's 100-year history.
"The size of the loss matters not only because it impacts what it will cost to restructure the company, but also the kind of bill for which the taxpayer is on the hook," said John Casesa, a managing partner at consultant Casesa Shapiro Group LLC in New York. "Conditions in this quarter could not have been worse."
GM's future may pivot on whether Wagoner is able to persuade President Barack Obama's auto task force to approve as much as US$16.6 billion in additional money to keep the biggest US auto maker operating. He was scheduled to meet with the panel yesterday in Washington.
GM on February 17 said it needs at least US$2 billion more in loans next month or it will run out of cash. Should the task force opt to withhold further aid, GM's only option may be a government-backed bankruptcy.
Fourth-quarter sales plunged 34 percent to US$30.8 billion, Detroit-based GM said. Excluding some expenses, the operating loss was US$9.65 a share, more than the US$7.46 average estimate of nine analysts surveyed by Bloomberg News. GM last posted an annual profit in 2004.
"We expect these challenging conditions will continue through 2009," Wagoner said in the statement.
GM said its 2008 annual report is likely to include a "going concern" opinion from auditors, a signal of doubt about the company's future viability. That decision hasn't been made yet, Chief Financial Officer Ray Young said on a conference call with reporters.
The deficit was US$15.71 a share, wider than the year-earlier net loss from continuing operations of US$1.5 billion, or US$2.70, GM said yesterday in a statement. The US$30.9 billion annual loss was the second-largest in GM's 100-year history.
"The size of the loss matters not only because it impacts what it will cost to restructure the company, but also the kind of bill for which the taxpayer is on the hook," said John Casesa, a managing partner at consultant Casesa Shapiro Group LLC in New York. "Conditions in this quarter could not have been worse."
GM's future may pivot on whether Wagoner is able to persuade President Barack Obama's auto task force to approve as much as US$16.6 billion in additional money to keep the biggest US auto maker operating. He was scheduled to meet with the panel yesterday in Washington.
GM on February 17 said it needs at least US$2 billion more in loans next month or it will run out of cash. Should the task force opt to withhold further aid, GM's only option may be a government-backed bankruptcy.
Fourth-quarter sales plunged 34 percent to US$30.8 billion, Detroit-based GM said. Excluding some expenses, the operating loss was US$9.65 a share, more than the US$7.46 average estimate of nine analysts surveyed by Bloomberg News. GM last posted an annual profit in 2004.
"We expect these challenging conditions will continue through 2009," Wagoner said in the statement.
GM said its 2008 annual report is likely to include a "going concern" opinion from auditors, a signal of doubt about the company's future viability. That decision hasn't been made yet, Chief Financial Officer Ray Young said on a conference call with reporters.
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