Advertisement
Find a Car
Go!

GM Is Fearing Reaper, Barreling Toward Bankruptcy

Follow Richard

GM faces the reaper

GM faces the reaper

Enlarge Photo

Between lackluster sales, the sagging economy, and all that bailout mishegas, things are rough at General Motors. For weeks, we've been waiting for signs of improvement, convinced that the situation can't get much worse.

We hate it when we're wrong.

GM's auditors at Deloitte & Touche have submitted a report to the U.S. Securities and Exchange Commission that says, in essence, "We're not sure about this at all--and by 'this', we mean GM's ability to keep its doors open." Specifically, the filing says that "The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern" [emphasis and link ours, natch].

Now, in reality, this doesn't mean much for GM--at least not directly. The company will move forward with its restructuring plan and continue its full-court press for bailout support. (You'll recall from our handy-dandy Bailout Bonanza wall chart--suitable for framing--that General Motors has received $13.4 billion so far, with another $16.6 billion in the hopper, bringing the grand request to a nice, tidy $30 billion.) Those funds aren't put in jeopardy by the Deloitte & Touche report, since there's no clause in the General's agreement with the feds that penalizes the company if auditors raise doubts about the company's viability. Whew.

No, what the auditors' report does is increase tension, both at GM and among the general public. It raises the Boogeyman of Bankruptcy--who's looking a lot more like Casper the Friendly Ghost these days--and it puts a dent in the General's increasingly well-worn brand. Too many more of those dings, and GM might as well just bite the bullet and dive into Chapter 11, whether the governor likes it or not. Heck, at least we could stop waiting for the other brake shoe to drop.

[source: Freep]

Advertisement
 
Follow Us

 

Have an opinion?

  • Posting indicates you have read this site's Privacy Policy and Terms of Use
  • Notify me when there are more comments
Comments (7)
  1. "Private Health insurance Killed Detroit "

    Does anyone out there care that it's healthcare costs and obligations to retirees that destroyed Detroit? Put every worker on medicare, retirees too- cancel all the VEBA's and call that the end of federal assistance- then let's see how it all shakes out.
    The UAW is completely asleep at the switch- So are politicians-and other Americans are clueless that Detroit's demise is only the first step of the total destruction of the middle class in this country.
    Michigan's own Congressman Conyers has a bill HR 676 that would fix this situation- is anybody even fighting for it?
     
    Post Reply
    Vote
    Bad stuff?

  2. "Detfan"

    GM is going to be fine. There only problem is the ongoing SAAR under 10M. The langer sales stay at that level, the longer GM will have to adjust their bridge loan amounts. They are now profitable, they say, at 12.5M SAAR. Tremendous overhead savings take full effect in 2010. They are holding their retail market share, curtailing damaging rental fleet sales, and should increase market share slightly this year, with the introductions of the 2010 Camaro, 30 MPG Equinox, Buick LaCrosse, and Cadillac SRX. Even the import dealers in a survey says that GM's product line going forward is the best in the industry.
     
    Post Reply
    Vote
    Bad stuff?

  3. "Beware Lobbyists"

    JerseyGeoff posts this bilge everywhere, folks. NO ONE who pays actual real taxes in this country wants nationalized healthcare, because they're already watching their bills go up thanks to Mr. Obama.
     
    Post Reply
    Vote
    Bad stuff?

  4. "Billions at a time"

    we could all use some comic relief
     
    Post Reply
    Vote
    Bad stuff?

  5. "With the song this time"

    http://www.youtube.com/watch?v=Llq1UQsYVcY
     
    Post Reply
    Vote
    Bad stuff?

  6. "JUDGE"

    Management at General Motors made the notion of bankrutcy the boogie man and scared prospective purchasers into thinking that their warranties would be useless and that they would be unable to get parts for their cars. These company execs are the sorriest manufacturing no-minds in the country. GM has, for decades, made some of the best automobile and other machines in the world, particularly considering the cost of purchase. They have demonstrated in the Malibu and the Pontiac G8 that the company is still capable. It's the people in the executive tower who have ruined all this. I say Chapter 11 tomorrow, scale off the dead skin, and get back in the game!
     
    Post Reply
    Vote
    Bad stuff?

  7. "I pay taxes..."

    I also pay over $500/month for ("very good") insurance and I get little back except high deductibles. I know I subsidize ER visits for 50 million who don't have coverage but I'm ready for something new, so my kids are safe and I don't have to go bankrupt when disaster strikes. Give us medicine instead of bombs.
     
    Post Reply
    Vote
    Bad stuff?

 

Have an opinion? Join the conversation!

Advertisement
Try My Showroom
Save cars, write notes, and comparison shop with hi-res photos.
Add your first car
Advertisement
Take Us With You!
   
Advertisement

 
© 2014 The Car Connection. All Rights Reserved. The Car Connection is published by High Gear Media. Stock photography by izmo, Inc. Send us feedback.