"Substantial Doubt" Clouds GM's Future

(CBS/ AP)  General Motors Corp.'s auditors have raised "substantial doubt" about the troubled automaker's ability to continue operations.

The company revealed the concerns, raised by the accounting firm Deloitte & Touche LLP, in its annual report filed on Thursday.

GM has received $13.4 billion in federal loans as it tries to survive the worst auto sales climate in 27 years. It is seeking a total of $30 billion from the U.S. government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.

Also revealed in the filing was GM CEO Rick Wagoner's salary for 2008, which was $5.4 million, down from $14.1 million in 2007. This year, Wagoner has vowed to work $1.

GM says in its report that its auditors cited recurring losses from operations, stockholders' deficit and an inability to generate enough cash to meet its obligations in raising substantial doubts about its ability to continue as a going concern.

The company said in its filing that its future depends on successfully executing the viability plan submitted to the government in February to justify the loans.

"If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code," GM said in the annual report, filed with the U.S. Securities and Exchange Commission.

As CBS News producer Guy Campanile reported last week, some analysts believe GM can pull a U-turn if it continues to get government help and at meets least three conditions:

First - GM has to make cars people want to buy.

Second - GM needs relief from its labor agreements.

Third - The economy must begin to improve quickly.

GM, the report said, is highly dependent on auto sales volume, which dropped rapidly last year.

"There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn," the company wrote.

[craigh9]

It is time for Congress to realize what most americans knew back in December. Bankruptcy is key to allow the necessary changes within GM to be made. Now they are probably too far gone for even that to work.
NO MORE BAILOUT LOANS - it is time for them to sell off pieces and move this country from a Big 3 disaster to a MODERATE 9 or so that will be nimble enough, as well as appropriately managed, to actually survive long term.
I realize doing nothing will be extremely painful, but continuing to throw good money after bad to have GM execs and the UAW do nothing but TALK will eventually end up with that result anyway.
BITE THE BULLET - IT'S OVER!

[philabias]

NOTE TO UNION
NO CARS
NO JOBS
NO UNION

[sero5]

American consumers are obsessed with imported goods. But you never hear our politicians blame American consumers for wanting more imports over domestic goods, especially cheap imports from China. As for GM, sell it to the Chinese, since they are flush with money. P.S.: Over the last few years, Buick sells more cars in China than they do in the U.S.A.

[philabias]

I love chevrolet Allways have , its all I drive. BUt it is dead it took Bailout money and that means ,Just like CITI and AIG they are failures and nomatter how much money or Liberal Leader throughs at it , its dead. Americans arent going to trust them and rightly so. Most see it as a slap in the face oh every busieness out there for the government to play favorits while those who did it right are being punished,and it doublely wrong to them,because when those who do it wrong and destroy there wealth arent liqudated at discounted price for the rest of the small guys to grow with so this plan doublely shorts them. That why when they bailout the market dives they bail again and the market dives and over and over and over and he just cant figuar out why . I dont think he can learn,
Hopefully We Can .................. 6600 on the Dow today how much farther do you want to go down the Obama Hole. He wont stop untill we reach bottom And he reminds us of that evey Day

[nolalou]

Throw more Tax money at them Obama....Its feels great to spend other people money!

This Government is all about rewarding the Stupid, Foolish, Lazy, Corrupt, and Criminal while punishing the Law Abiding, Honest and Responsible Citizens! Have the Liberals ever noticed when you reward bad actions and punish good action you get less good actions and more bad actions? In that vain, people need to show the government they (Get It) & stop paying their Mortgages & Taxes!
Posted by american_11-2009

Liberals? Gee, let me get this straight,, wasn't that bailout they got last year, you know when that 'liberal; George W Bush was president! You really are a MORON , aren't you?

[perk235]

I'm surprised that this article failed to mention that the auditors found "MATERIAL WEAKNESS" in the company's accounting system.

[fizzie319]

I love the three factors that are required for GM's turn around:

First - GM has to make cars people want to buy.
Second - GM needs relief from its labor agreements.
Third - The economy must begin to improve quickly.

Lets see here... If the first factor some how miraculously gets met, the third factor will be the companies demise. So far, no action that has been imposed has worked, or has had time to work.

[hetup-2009]

Hurry up and die, get on with the rat killing. What a terrific waste of bailout money. Comments on this site predicted GM would be a failure no matter what was done. It is a dead company. Bury it and move on.

[tigerrram9]

The Union needs to think about saving the company and the not the outrageous paychecks. Let the employees pay for their health insurance like most american workers do. Instead of putting the health care payments on the company, that is why American cars are more expensive than Hyndai or Honda....

[art001-2009]

First - GM has to make cars people want to buy.
- it will take billions and at least a couple of years for GM to come up with designs for cars people want to buy. Nothing in the pipeline so this is not happening. Can't expect the Cobalt electric car to be their savior.

Second - GM needs relief from its labor agreements.
- GM not willing to get rid of the billions of retiree benefits that have committed to which is a huge financial burden. So this is not going to happen either.

Third - The economy must begin to improve quickly.
- No end in site for the economy. Factor in at least a year before turn around. Don't think GM can wait that long.

The end result is clear. GM is a lost cause. Don't bother giving them any more tax payer money because we're not getting it back. Chapter 11 and then start a new company.