GM posts whopping $30.9 bn loss for 2008

GM posts whopping $30.9 bn loss for 2008
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First Published: Fri, Feb 27 2009. 11 43 AM IST
Updated: Fri, Feb 27 2009. 11 43 AM IST
Chicago: General Motors warned of a “challenging” year ahead as it posted a $30.9 billion 2008 loss on Thursday, bringing the tally from four consecutive years of bleeding balance sheets to a whopping $86.6 billion.
The 2008 results were nonetheless an improvement upon 2007, when GM posted a $43.3 billion loss due primarily to a massive accounting charge, even as annual revenues fell to 149 billion from 180 billion in 2007.
The struggling automaker, which last week asked the US government for billions more in emergency loans, said its dismal results reflected the global economic crisis and an industry-wide collapse in demand. “2008 was an extremely difficult year for the US and global auto markets, especially the second half,” GM 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,” Wagoner said.
General Motors said last week it could need up to another 22.6 billion dollars in government loans to survive the economic downturn and announced plans to slash 47,000 jobs worldwide amid a massive restructuring plan.
The automaker asked the US Treasury for an additional $16.6 billion on top of the 13.4 billion received in recent weeks and said it is also asking for funding support from the governments of Canada, Germany, Britain, Sweden, and Thailand.
“GM requires this funding in 2009 to continue operations until global automotive sales recover and its restructuring actions generate benefits, resulting in the company being able to fund its own operating requirements,” the automaker said Thursday.
The Treasury Department has until 31 March to decide whether the massive restructuring plans submitted by GM and Chrysler last week are enough to ensure the long-term viability of the two auto icons.
The $53.32 annual loss per share dwarfed the $26.94-dollar loss predicted by analysts. GM’s fourth quarter loss of $9.6 billion amounted to $15.71 per share, nearly double the forecasted $7.40-loss.
GM said it is working with its auditors to “determine whether there is substantial doubt about GM’s ability to continue as a going concern.” GM said it managed to slash North American structural costs by $3 billion last year, but its North American operations nonetheless posted a 2008 loss of 14.1 billion dollars.
GM, which lost its title as the world’s largest automaker to Toyota last year, noted that global industry sales in 2008 were down 5%, or 3.6 million vehicles, compared with 2007 levels.
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First Published: Fri, Feb 27 2009. 11 43 AM IST
More Topics: US | General Motors | Loss | Company | Auto |