General Motors Corp posted a loss of nearly $31 billion on Thursday for 2008 and said its auditors were likely to cast doubt on its viability as it seeks an expanded federal bailout to stay afloat.
Revenue plunged by more than a third to $30.8 billion. GM burned through more than $5 billion in the fourth quarter and ended the year with $14 billion in cash, including the first $4 billion in loans it received from the U.S. Treasury.
The automaker, which asked for up to $30 billion of U.S. government aid, also warned its pension plans were underfunded by about $12.4 billion as of the end of 2008, raising the risk of a greater funding gap in the years ahead.
GM's loss was the deepest among Detroit-based automakers in 2008 as industry-wide auto sales dropped to 16-year lows. Ford lost $14.6 billion. Chrysler, controlled by private equity firm Cerberus Capital Management, lost $8 billion.
The release of the grim results came on the same day that GM Chief Executive Rick Wagoner and other senior executives were scheduled to meet with members of the autos task force headed by U.S. Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.
They are in fact-gathering mode right now, and so we are here in order to respond to their questions, GM Chief Financial Officer Ray Young told reporters on a conference call from Washington ahead of the meeting on GM's aid request.
This is not a negotiation session by any means, he added. They are going to continue to gather facts and continue to ask for clarifications in terms of our submissions.
Shares of GM were down as much as 8 percent in pre-market trade but pared those losses. The stock, which has lost almost 90 percent of its value over the past year, was down almost 1 percent in morning trade at $2.53.
GM said it could receive a going concern notice from auditors when it files its annual report for 2008 with U.S. securities regulators by the middle of March.
The company, which took $6 billion in charges to shut down North American plants as sales tumbled last year, posted a net loss of $30.9 billion for 2008.
That marks the second-largest loss for the 100-year-old automaker behind only the $38.7 billion loss for 2007.
GM has lost $82 billion over the past four years and cut 92,000 jobs over that period. The combined loss for the top U.S. automaker is equivalent to about $56 million a day since the start of 2005.
GM's auto operations burned $19 billion in 2008 and the company projects burning through another $14 billion this year as it cuts output to run down inventories of unsold cars.
S&P equity analyst Efraim Levy said GM's cash burn projection for this year could prove too low because of the drop in sales and pressure on the supply base.
It reinforces for us the notion that GM will need multibillion government assistance to continue as a going concern, Levy said in a note for clients.
The automaker has received $9.4 billion from the U.S. government this quarter and has said it needs additional funding as soon as next month to avoid bankruptcy.
GM's fourth-quarter net loss widened to $9.6 billion from $722 million a year earlier.
Young said the quarterly loss reflected how a slump in auto sales that began in the U.S. market had become a global crisis. GM posted losses on its auto operations in every region in the quarter, including Asia.
When we talk about contagion, what we saw was that the credit crisis was starting to spread, Young told reporters.
Analysts have said the key to valuing GM's shares and debt is the progress the company is making in restructuring talks with creditors, including the United Auto Workers union.
Existing shareholder equity could be sharply diluted as existing bondholders and the union are offered shares in a recapitalized company in an attempt to reduce GM's cash drain from its debt obligations.
GM, like its smaller rival Chrysler, faces pressure to wrap up concession talks with the UAW on how to cut funding promised to a healthcare trust under the terms of the federal bailout.
GM has offered the UAW up to $10.2 billion in new equity in order to give up a cash claim on half of the $20.4 billion it is owed for the trust fund.
The UAW reached a deal with Ford this week on terms to restructure its own retiree healthcare debt to the union on similar terms.
But GM's parallel negotiations with its bondholders have been more difficult. GM bondholders have been asked to take a payout equal to just $9 billion of the $27 billion that they are collectively owed.
Representatives of the debt holders have said GM's plan does not go far enough to reduce the automaker's debt and have asked for steps to safeguard their remaining investment in the company.
Young said GM could not comment on its negotiations with bondholders ahead of an end-March deadline to launch the debt exchange.
We are getting to a more sensitive stage in terms of the whole bond exchange process here, he said. From our perspective, we are marching toward the March 31 deadline.
(Reporting by Kevin Krolicki and David Bailey; Editing by Derek Caney)