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GM posts second-biggest loss in operating history

By Peter McKay, 02 Mar 2009 Industry

GM posts second-biggest loss in operating history

The news does not get better from Detroit... Peter McKay reports on the latest figures and losses.

Showing the signs of excruciating timing, General Motors has posted its second-worst annual loss ever, while warning the market that it could get a 'going concern' notice from its auditors which may or may not declare the creaky giant unfit enough to continue operating.

GM's staggering loss of US $9.6 billion in the fourth quarter and US$30.9 billion for all of last year comes as it is asking for more federal loans. GM has already received $13.4 billion in taxpayers' funded loans and says it needs up to $16.6 billion more, and soon...

The 'going concern' statement, issued by auditors when they question a company's viability, is a possibility. GM has already admitted that without government help, it cannot survive the economic crunch.

According to USA Today, GM admits it blew $5.2 billion in cash in the fourth quarter and expects to burn through $14 billion this year, much of it in the current quarter. It has also put its debt at $82 billion.

On top of these sobering numbers, GM's sales have fallen in a heap in the US and elsewhere.

Opel, its European arm, has been relatively healthy (if losing money) but stands to be dragged down with the sinking ship.

Opel's workers have rallied to demand that the parent company GM spin off Opel. "Opel is not the disaster. GM is the disaster," GM Europe union leader Klaus Franz said.

In further bad news for GM took the second-last spot, ahead of wooden spooner Chrysler, in Consumer Reports magazine's new reliability survey.

Detroit's other member of the Big Three, Ford, performed better, kind of. It was fourth from the bottom, ahead of Suzuki.

Honda cracked the top spot for the third straight year, closely followed by Subaru, Toyota and Mazda. Locked together next were Mercedes-Benz, Nissan, Volkswagen and BMW.