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http://www.foxnews.com/story/0,2933,505130,00.html

General Motors Corp.'s auditors have raised "substantial doubt" about the troubled automaker's ability to continue operations, and the company said it may have to seek bankruptcy protection if it can't execute a huge restructuring plan.

The automaker revealed the concerns Thursday in an annual report filed with the U.S. Securities and Exchange Commission.

"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," auditors for the accounting firm Deloitte & Touche LLP wrote in the report.

In pre-market trading, GM shares fell 14 percent from Wednesday's close, to $1.90.

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 government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.

The company faces a March 31 deadline to have signed agreements of concessions from debtholders and the United Auto Workers union to show the government it can become viable again. On Feb. 17 it submitted the restructuring plan to the Treasury Department that includes laying off 47,000 workers worldwide by the end of the year and closing five more U.S. factories.

GM said in its filing that its future depends on successfully executing the plan.

"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," the Detroit-based automaker said in the annual report.

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.

GM has said it wants to avoid bankruptcy protection because it would scare off customers. Car buyers, the company has said, would be reluctant to buy from an automaker in bankruptcy protection due to fears that it wouldn't be around long enough to honor warranties or make replacement parts.

GM, in its viability plan submitted to the Treasury last month, said it explored three bankruptcy scenarios, all of which would cost the government more than $40 billion.

Chief Operating Officer Fritz Henderson said at the time that the government would be the only place the company could get financing for bankruptcy reorganization, because the credit markets are frozen. The worst-case bankruptcy scenario would cost the government $100 billion, Henderson said, because revenue would severely drop due to a lack of sales.

He said there is not a lot of research about whether people would buy cars from an automaker in bankruptcy protection, but "that which is there suggests that sales fall off a cliff."

GM warned last month that its auditors may raise the "going concern" doubts, and industry analysts said auditors' statements may trigger clauses in some of GM's loans, placing them in default.

But the company said in its filing that it has received waivers of the clauses for its $4.5 billion secured revolving credit facility, a $1.5 billion term loan and a $125 million secured credit facility.

"Consequently, we are not in default of our covenants," the report said. "If we conclude that there is substantial doubt about our ability to continue as a going concern for the year ending Dec. 31, 2009, we will have to seek similar amendments or waivers at that time."

GM spokeswoman Julie Gibson said there is no clause in the terms of the government loans that places them in default if the auditors raise doubts about GM's ability to keep operating.

"That was not a condition of the loan. It's not in the agreement," she said.
 

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Time for change
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The only reason I don't suspect this is the end of days, is because in the end of days it explained about a single world leader that everyone loved, followed by 7 years of ... well the best times quite frankly.

Well, no one liked George Bush, so we couldn't have concluded he was the world leader, and that what we just came from was the best times we would ever have economically, health and saftey wise.

Now... If you were to ask me, do I think Obama was going to fit that bill, I'd say YES, if he wasn't such a *** Tard.

Obama is the Harbinger of economic death. Sarcastically speaking, I'm SO thankful we had the very insightful left to lead us during this time, and that Obama had SOOO Much expereince leading an office like this, well with the exception he is half WHITE< that makes him only HALF qualified, because we all know you need to be BLACK in order to know how to be the president apparently.

So, the reason I state this, is because during a stable economy I wouldn't care as much if GM failed, and became a single nameplate manufacturer, but GM failing, leads to Dodge failing right away, which leaves a supplier vacuum, and that will have an impact for sure.

Just the other day, they wanted my wife to renegotiate her contract so that she can "take one for the team" to relinquish her cost of living increase, right while were in the middle of spending all this money on her Masters Degree because NYS says you cannot teach after a few years without a Masters... RIIIGHT. Fuc_ing scamming arse colleges.
 

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My dog is cooler than you
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Fuck GM (In the butt. no lube). Fuck Ford (it can have lube- they're actually trying) and fuck Dodge if you want.
The bread and butter of the auto market is family sedans. Ford started actually trying with the Fusion and Chevy made some effort with the Malibu but they both put too much effort/money into their niche market vehicles and not enough into the real cash cows.
At the Portland Auto Show, I saw three GM vehicles I'd actually want- Corvette, G8 GT, and Solstice Coupe. None of these are cars that will sell in large enough numbers to turn the company a profit. Instead they are touting their hybrid Tahoe (YAY! it gets 17 mpg!) and the vaporware Volt while the most lucrative market segment in the modern market is overflowing with self competition.

For instance- the Passat and the A4 share a platform but nobody looking at one cross-shops the other. The Camry and the ES300 share a platform but again- nobody cross shops them. But the Ion, the Cobalt, and the G5 are all the same platform and very close competition for each other. The Fusion competes directly with its lincoln, mazda, and mercury counterparts. So you have the assembly lines one company pays for pumping out cars and those cars are competing directly with each other. Toyota stopped making the celica because it was too close a competitor for their Scion tC. They stopped making the xA because it was too close to the Yaris.

And that's not even the best part. If the Big Three (only one is still in the top three) don't start manning up and fixing their entire business process, they still won't be solvent when the chinese companies arrive on the US auto market. Two Chinese companies are planning on debuting here in 2010 and two more in 2012. Hyundai has already shown that it doesn't take long for a good product and a good price to turn the market their way regardless of name recognition.

If they don't shape up on their own, they're going to get stomped out. No amount of labor union lobbying, socialist government spending, or other political tricks will be able to save them from Asia.
 

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Filmmaker
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I said they shouldn't of bailed em out....but I'm just a college a student. I fucking hate this economy, throwing money at shit doesnt always mean it's going to fix it.
 

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My dog is cooler than you
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566 Posts
Yes... Socialism cause GM and Ford to ignore R&D, to put all their eggs in the large SUV market and allow the UAW to put a stranglehold on them until they didn't get to make any smart calls because their worker overhead was obscenely high.

Good call, smart guy.
 

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Time for change
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I'm just trying to figure out now, why... If GM is worth 1.1x Billion, we just gave them several times their worth?
 

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You do realize that they employ slightly more people within the country than Abercrombie and Fitch. If A&F went under, do you think they'd be getting "bailout money".

Now I realize that the big problem is all the tier 1 and 2 suppliers that are going to struggle afterwards, but still. If they can't compete let them die. At the end of it all we'll have each put about $890 dollars into the big three combined with nothing to show for it.
 

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2turbos1supra
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The government should just buy the company, say fuck you to the unions and the losers in management, restructure into an appealing package and put it out in the market.
 

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My dog is cooler than you
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Just make them file Chapter 11. No reason the gov't should buy them. Course, there's no reason the gov't should have bought proven bad mortgages either... so who knows. Maybe it will happen anyway. damnit.
 

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Working for GM and having many friends working for Honda and Toyota I can say it has nothing to do with the vehicles themselves. It's the mass populations fear of spending so much as a dime anymore. Everyone I know working in this industry be it foreign or domestic is trying get out ASAP.
 

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Moderator
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Discussion Starter #16
The Gov is not bailing out GM, they are bailing out the UAW who helped Obama get elected. If you think they give a shit about the US auto industry I'm afraid you are mistaken... they just want to payoff the unions so their members will continue to elect Democrats.

Just my opinion. :)
 

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!black
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And what kills me is that a local dealer is trying to get 60 grand for their first allotment of Camaro SS's :lol:

Zero dealer control, UAW, and general fear are going to destroy the general. A shame too... they have the *ability* to get their shit together if they would just get rid of the never ending money drain of poor management and UAW.
 

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!black
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The Gov is not bailing out GM, they are bailing out the UAW who helped Obama get elected. If you think they give a shit about the US auto industry I'm afraid you are mistaken... they just want to payoff the unions so their members will continue to elect Democrats.

Just my opinion. :)
UAW wasn't the swing factor... at all really.
 

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Time for change
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Just remeber what the popular vote is. And its all unions, not just the UAW.
My wifes teacher union was all about indoctrinating their slaves to vote for democrats, because they are retarded.
 

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Discussion Starter #20 (Edited)
UAW wasn't the swing factor... at all really.
Organized labor (not just the UAW) is a huge factor in Democratic victories, just as the Christian vote is in Republican victories.

Swing vote maybe not, but I doubt he would have won without them.
 
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