Mostly Cloudy81° WeatherMostly Cloudy81° Weather

Untitled:48300954

Slammed by crashing sales, General Motors Corp. said Thursday that it lost $9.6 billion in the fourth quarter and $30.9 billion for all of 2008, its second-worst year on record.

The results, which more than doubled dismal analyst expectations, are further evidence of the dire situation that the Detroit automaker finds itself in.

It has already received $13.4 billion in government loans to stay afloat, and this month it requested an additional $16.6 billion in taxpayer-funded bailout cash.

The automaker said it needs the money because it is losing money at such a fast rate that it would soon be unable to fund operations and would become financially insolvent.

In the fourth quarter, GM said, it burned through $6.2 billion in cash, or more than $2 billion a month, and for all of 2008, it reduced its cash hoard by $19.2 billion.

GM ended 2008 with $14 billion in cash, including $4 billion it had received from the Treasury Department. A year earlier, it had $30 billion in liquidity reserves on hand, and the huge and rapid decline is a testament to the challenges the company faces.

Company officials said Tuesday that they expect to receive a "going concern" notice from GM's auditors in response to its annual filings.

That would indicate the auditors' concern that the automaker is unable to continue operations from a financial point of view.

Calling last year extremely difficult, GM chairman and chief executive Rick Wagoner said he expects that "these challenging conditions will continue through 2009."

Wagoner was in Washington on Thursday to meet with Obama administration officials regarding the company's new funding request in the revised turnaround plan it submitted last week.

As part of that plan, GM pledged to eliminate 47,000 jobs worldwide this year, dramatically reduce production and cut four brands from its U.S. lineup, as well as renegotiate terms with its unions and bondholders.

For the full year, revenue decreased 17.2 percent to $149 billion, and GM's U.S. vehicle sales volume was down 23 percent in 2008.

The yawning $30.9 billion loss, or $53.32 a share, was the second-worst in the automaker's history, after 2007's. That year, GM lost $43.3 billion, largely because of a tax-related accounting charge.

GM lost money in each of its four worldwide regional markets, including long-profitable Latin America, where a $1.3 billion revenue decline led to a $181 million loss for the quarter. GM also lost $1.9 billion in Europe and $917 million in Asia.

But it was in the company's most important market, North America — and particularly the United States — where it was hit worst. Revenue in the region fell 31 percent, to $19.3 billion, compared with a year earlier, leading to a $2.1 billion loss.

Car sales fell dramatically in the United States after the first quarter of last year, and GM's losses began soaring shortly thereafter.

Untitled:48300954 02/26/09 [Last modified: Thursday, February 26, 2009 9:38pm]

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...