Auditors: GM May Not Be A "Going Concern"

GM’s auditors have looked at the books and made their determination: “our recurring losses from operations, stockholders’ deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern.” The filing with the SEC is refreshingly blunt, in a carefully coded way. “Sales volumes may decline more severely or take longer to recover than we expect . . . and if they do, our results of operations and financial condition and the success of the Viability Plan will be materially adversely affected.” I wonder how many billions of dollars lie between the terms “affected,” “adversely affected” and “materially adversely affected.” The Detroit News finally makes the transition from cheerleader to smokin’ hot crime scene investigator—at least for this piece.

The Detroit automaker almost ran out of money in December before winning commitments of up to $13.4 billion in federal loans. GM said last week it needs up to $16.6 billion more to survive the weakest sales market since the early 1980s, including $2 billion this month to avoid bankruptcy.

GM ended the year with $14 billion in cash, securities and readily available assets — about $3 billion more than the minimum amount it needs to pay bills.

The automaker, which has lost about $82 billion in recent years, is implementing a broad cost-cutting plan aimed at becoming a viable company and repaying the federal loans.

GM is eliminating 47,000 jobs this year, shuttering 14 plants by 2012 and selling, shrinking or killing its Saturn, Hummer, Pontiac and Saab brands. Saab filed for reorganization last Friday in the Swedish equivalent of a Chapter 11 bankruptcy.

GM also is forcing most of its U.S. salaried workers to accept temporary pay cuts.

And the good news is . . . Rick Wagoner has taken a pay cut! Story to follow.