GM Lost Nearly $31 Billion In 2008

(CBS/AP)  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 nation's biggest domestic automaker said Thursday it lost $30.9 billion for the full year. That's nearly $85 million a day, or more than $3,700 on every vehicle it sold in 2008, reports CBS News chief business correspondent Anthony Mason.

GM expects to state in its upcoming annual report whether its auditors believe the company remains a "going concern." GM and its auditors must determine whether there is substantial doubt about the automaker's ability to continue it 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.

On Wall Street, GM shares fell 17 cents or nearly 7 percent to close at $2.38.

Young said that auditors are studying the future of the company because "there's uncertainty with how the Treasury will view our viability plan," and "uncertainty on whether we're going to be able to execute the terms of our loan agreement."

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 Chapter 11 bankruptcy protection. 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.

"I think they've asked for another $16 billion. It could be as much as twice that," auto industry analyst John Wolkonowicz told Mason.

But taxpayers are saying enough is enough. In a CBS News-New York Times poll, more than two-thirds said the government should not give any more aid to car companies.

"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."

Young said GM would reduce its structural costs by another $4.5 billion in 2009, from $30.8 billion to $26.3 billion.

On Wednesday, executives of Chrysler LLC took their requests for billions in new loans to members of task force.

Chrysler Chairman and chief executive Bob Nardelli, Vice Chairman Tom LaSorda and Chief Financial Officer Ron Kolka huddled behind closed doors with the administration panel, said a Chrysler official, who spoke on condition of anonymity because of the private nature of the talks.

Auburn Hills, Mich.-based Chrysler has received $4 billion in loans and wants another $5 billion in federal aid and the approval of an alliance with Italian automaker Fiat SpA.

GM's adjusted cash burn for the year in 2008 was $19.2 billion, but Young expects that to fall to $14 billion in 2009 as the company cuts structural costs.

Despite sliding sales, GM still controls more than a fifth of the U.S. market, 9 percent of the market in Europe and 7 percent in Asia. And the company appeared on the verge of a turnaround until gas prices skyrocketed and the economy tanked, reports Mason

But the company still will need more government help, Young said, because GM expects the entire auto industry to sell a dismal 10.5 million vehicles in the U.S. this year.

Most of the cash burn this year can be attributed to the temporary shutdown of many GM plants during the month of January, he said.

"We're not pleased with a negative $14 billion cash flow burn, that's still a very, very sizable amount," he said, "but at the same time we recognize that the industry conditions in '09 are going to remain fairly challenging."

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[850Rick]

GM's ills are simple: Poor management(they are a direct reflection of their workforce), poor reputation because of poor quality product (even if the product built now is higher quality than Toyota which could take years to renew consumer confidence) and union wages excessive for the skill involved ($28hr to tighten bolts on an engine which should be a $12hr job). They are lucky in that the US Gov't will not let them go under because of the economic reprocussions of putting millions more out of work. American Motors went under in the 70s and nobody shed a tear but yet we are expected to fully back GM.

[jetranger7]

Ya, I was at the grocery store recently and was in the magazine section going thru the magazines and they still are spending millions on advertising in magazines like cosmo, popular mechanics, good house keeping, natl. geographic, not to mention billboards and radio and TV and newspaper advertisements,, they could save millions if over a 5 years they cut that down to just 50%,, obviously they don't care, and who rwally looks at all that junk anyway !

[sockpuppet4]

GM lost 31 billion, and Bush lost 485 billion in deficet spending and another 787 billion in TARP bailouts.

Bush shoulda been learning off of GM.

[davidsjones-2009]

Let GM go the way of the B/W TV set. Who needs a company that produces bad cars, run by bad people making very bad decisions. This is Karma for GM destroying the Electric Car.

[claydowner]

There are many cars in Europe like city cars with turbodiesel engines with rail injection systems that average at least 50 MPG. These cars are big enough for a 6 foot tall man to sit in comfortably and they will pass California emissions tests. This is especially true when ultra clean diesel fuel is used. Many of the better selling models are made by Ford and GM. Many of the newer advanced technology turbodiesels outperform electric hybrid cars like the Toyota Prius in fuel economy. These turbodiesel cars do not smoke and they have top speeds of 110 MPH so going the speed limit is not a problem nor is acceleration with a turbocharged engine. Nearly half of new car sales in Europe are turbodiesels because even larger cars with diesel engines will get 30% better mileage than comparable gasoline model cars. Turbodiesels also are a better value because if you maintain them properly diesel engines can easily last 250,000 miles or more with many routinely lasting 400,000 miles. You can also burn biodiesel as well if you are concerned about carbon emissions. Volkswagen has a turbodiesel reported to get 70 MPG. Audi has a turbodiesel that gets 80 MPG. The Europeans have had diesel cars for decades. With so many known advantages why have Ford and GM not built a hundred million highly turbodiesel cars for America? I call it incompetent management. No one should own a Hummer or an SUV but everyone should own an advanced technology turbodiesel that gets 50 MPG. This is the least we can do to eliminate our imports of OPEC oil. It also will save the lives of our soldiers in harms way. This would make lots of money for Ford and GM while simultaneously break our dependence of foreign oil. Turbodiesels are the best way to go but should be supplemented by plugin electric hybrid cars with diesel engines that could get 100 MPG. We can also get advanced fuels like dimethyl ether, DME, from coal gasification and biomass that is vastly superior to any commercial diesel fuel in use today. DME can be burned in diesel engines with very modest mechanical changes. Why are we not doing this now Dr. Chu? If Americans are smart we need to do what the Europeans are doing with these advanced technology turbodiesel cars. The more research you do the more you realize this is an excellent plan for our national energy policy.

[loyalto1]

I?m old enough to remember - GM has had a bad reputation since the early 1970's and it has STIGMATIZED them for life it seems.

[whitemale08]

Thanks George W. and Wall Street Republicans.

You Reaganites and Friedmanites with this 'free market' globalization nonsense has really hurt America.

Your disdain for 'middle-class' workers and people who work with their hands has set this country backwards to a post-industrial, service sector, big box retailer, krap 3rd world country.

You Wall Street Republicans hate machine-tools, getting your hands dirty and maintaining the line at the manufacturing plant. YOU HATE US!

Now look at you!

You look silly and stupid prostituting yourself like wh*res trying to sell your worthless stupid 'credit-default-swaps' and stupid derivatives, even to the government if they can figure a way to trick the tax payer into another bailout.

The workers laid-off should not worry because soon President Obama will put you back on the line manufacturing the parts and pieces we need to build a trans-continental mag-lev train to lift mankind out of this oligarchial/serfdom dead financial garbage that Ronnie Raygun, Milton Friedman and Alan Greenspan dug us into.

[grabandgo]

In 1955 GM and Firestone bought the complete mass transit system in LA, over 1100 miles of underground railroad. They destroyed it....Look at LA for the last 20 years, smog traffic...lots of cars that made a few people lots of money....Greed runs this country, that is why we are where we are

[frankie2fing]

I think it is safe to say that GM's product line isn't the most desirable
Posted by art001-2009

Safe to say, you have never driven GM products, thus I forgive your ignorance...

[Syndicate]

GM builds high quality cars. They beat out Toyota the last few years in quality surveys. The biggest problem with GM is bureaucracy just like the Federal Government. The company is far to big for anyone to manage. The only cars I like from GM is the Corvette and the Camaro if it ever hits the market. Unfortunately for GM my heart is firmly set on the 2010 Mustang.