Slammed by crashing sales, General Motors Corp. said yesterday 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, were further evidence of the dire situation the Detroit automaker finds itself in. It has received $13.4 billion in government loans to stay afloat, and this month requested an additional $16.6 billion in taxpayer-funded bailout cash.
The money is needed, the automaker said, because it is losing money at such a fast rate that it would soon be unable to fund operations and 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 were expecting 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 expected that "these challenging conditions will continue through 2009."
Wagoner was in Washington yesterday 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, drastically reduce production and cut four brands from its U.S. lineup, as well as renegotiate terms with its unions and bondholders.
GM lost $15.71 a share in the fourth quarter, compared with a year-earlier shortfall of $1.28 a share, or $722 million. Its revenue in the period fell 34 percent, to $30.8 billion from $46.8 billion, as sales plummeted in North America, Europe and even some high-growth emerging markets. Analysts had expected the quarterly loss to reach $7.40 a share.