GM Lost Nearly $31 Billion In 2008

GMC Envoys sit on the lot at Capitol City AutoMart in Berlin, Vt., Dec. 30, 2008. General Motors Corp. said Tuesday it will offer financing as low as zero percent over the next week for several 2008 and 2009 models as the automaker makes a big year-end sales push. (AP Photo/Toby Talbot)
AP Photo/Toby Talbot
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."