DETROIT — For General Motors, nothing has stopped the bleeding. Not cutting 50,000 jobs in the U.S. Not closing 11 factories. Not $13.4 billion in government loans.
The teetering company, once the symbol of American industrial might, revealed Thursday that it burned through $19.2 billion in cash last year on its way to a $30.9 billion loss. The century-old automaker said its only hope of living another year is more aid from the government.
GM has continued to spend on a company too big for the market, paying workers when plants are closed and covering other costs such as machinery, marketing, pensions and health care.
Expenses are so high and income so low that GM warned that auditors are reviewing whether it can continue as a “going concern.” Auditors are determining whether there is substantial doubt about the company’s ability to stay in business.
GM executives met for several hours with members of President Barack Obama’s auto-industry task force Thursday. Company spokesman Greg Martin said the meeting “was just the beginning of the hard work ahead for GM and the president’s team.”
The automaker, which reported a $9.6 billion fourth-quarter loss, burned up $6.2 billion in the last three months of 2008, including a $4 billion government loan, as the company fought the worst U.S. sales climate since 1982.
Chief financial officer Ray Young said GM expects to burn through $14 billion funding its operations this year, which raises the need for more government help.
The automaker expects the entire industry to sell 10.5 million vehicles in the U.S. this year, down from 13.2 million in 2008. But GM says it can’t break even until U.S. sales reach 11.5 million to 12 million.
“We’re not pleased with a negative $14 billion cash-flow burn. That’s still a very, very sizable amount,” Young said Thursday. “But at the same time, we recognize that the industry conditions in ’09 are going to remain fairly challenging.”
