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February 26, 2009

General Motors loses another $9.6 billion

CARS - Today General Motors Corp. posted a $9.6 billion USD fourth-quarter loss and said the company used up $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.

GM says it lost $30.9 billion during 2008 and continues to hint at bankruptcy if it doesn't get a government bailout.

Chief financial officer Ray Young said said that government 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 2008 and says it needs another $30 billion to stay out of Chapter 11 bankruptcy protection in the United States. Top GM executives were in Washington, D.C. today to meet with the Obama administration's auto task force to talk about restructuring and additional loans.

Young said GM would reduce its costs by another $4.5 billion in 2009, but its not enough to become viable. The company plans to cut 47,000 jobs around the world as it restructures with government loans in the United States and Canada.

GM's quarterly revenue fell 39% to $30.8 billion from $46.8 billion, as credit availability froze across the globe, and a lack of consumer confidence and fears of job losses kept people from buying new vehicles.

Since 2000, GM's American salaried workforce has shrunk by 33% from its 2000 high of 44,000 people. At the same time, the number of hourly workers has plunged by more than half – to about 63,700 people at the end of last year from 133,000 in 2000.

The credit crisis and American recession has spread globally like a virus paralyzing many industries with debt and luxury items like new cars have been the hardest hit.

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