WSJ reports auditors are questioning the company's ability to continue operations, quite possibly the worst kept secret around. Apparently the US government forgot to consider that even if they get a bailout, no one is going to buy a GM anymore.
General Motors Corp. said its auditor has raised "substantial doubt" about the auto maker's abiltiy to continue as a going concern, a move that could put the company into an even tighter financial squeeze.
If the company is unable to remain a gooing concern -- a buisness that is able to sustain itself -- it could violate covenenants on billions of dollars in debt and allow banks to call back the money GM has borrowed.
The news sent GM sparked a deep drop in the company's stock. In trading Thursday morning, GM shares were down 32 cents, or 15%, at $1.88.
The comments came in GM's delayed annual report filed with the Securities and Exchange Commission. Auditor Deloitte & Touche cited GM's continuing losses from operations, its negative net worth and an inability to generate the cash needed to run its business.
"Our recurring losses form operations, stockholders' deficits an dinability to generate sufficient cashflow to meet our obligations and sustain our operations raises substantial doubt about our ability to continue as a going concern," GM said it is annual 10K filing.
http://online.wsj.com/article/SB123625134434838921.html