Tech & Biz

GM Hit Hard by Auto Crisis, $30.9B Lost, Worst Year Since 1982

by Tina Kells | February 26, 2009 at 10:13 am

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General Motors Corp. announced its fourth quarter figures today and they were worse than expected. CFO Ray Young noted that GM will need as much as $30 billion in government aid just to stay out of Chapter 11.

GM reported losses of $9.6 billion in the last quarter of 2008 with a total of $30.9 billion lost in the year. The company burned through $6.2 billion in cash in the fourth quarter and was granted $13.4 billion in federal loans on Dec 31.

"2008 was an extremely difficult year for the U.S. and global auto markets, especially the second half," 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."

Young said GM would reduce its structural costs by another $4.5 billion in 2009, from $30.8 billion to $26.3 billion.

GM's adjusted cash burn for the year in 2008 was $19.2 billion, but Young expects that to fall to $14 billion in 2009 as the company cuts structural costs.

The company still will need more government help, he said, because GM expects the entire auto industry to sell a dismal 10.5 million vehicles in the U.S. this year.

Executives for GM are in Washington today to meet with Obama's auto task force. They will be asking for additional loans and unveiling restructuring plans.

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kuuva

at 17:31 on February 26th, 2009

maybe we need one or two of the big business schools to do some hard core analysis to see if this is a good investment by the US government. it may be, but it may not be?