Deloitte and touche raises concerns that GM may not survive

DETROIT – General Motors Corp.’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan.

The automaker revealed the concerns Thursday in an annual report filed with the U.S. Securities and Exchange Commission.

“The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,” auditors for the accounting firm Deloitte & Touche LLP wrote in the report.

GM also disclosed Thursday that Chief Executive Rick Wagoner received a pay package worth $14.9 million in 2008, although $11.9 million of his compensation was in stock and options whose value plummeted to $682,000 as GM’s share price sank.

Reports said Thursday that President Barack Obama’s administration is working “around the clock” to shore up the struggling automotive industry. GM said in a statement Thursday that the auditors’ going-concern view has no impact on the automaker’s restructuring steps.  The automaker has received $13.4 billion in federal loans as it tries to survive the worst auto sales climate in 27 years. It is seeking a total of $30 billion from the government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.        Breaking News

GM says Opel will be a seperate unit

GM Europe CEO Carl-Peter Forster says Opel is in need of capital.

BERLIN, Germany (CNN) — General Motors’ European division announced Friday that its German subsidiary, Opel cars, will become an independent unit of the company.

Under the restructuring plan, announced by GM Europe on Friday, the company will ask for a more than $4 billion bailout from Germany and the governments of other European countries that have Opel plants, GM Europe CEO Carl-Peter Forster said at a news conference.

“We are in need of capital that we hope to get with the help of the public sector of about 3.3 billion euros,” said Forster, who was speaking at Opel’s main plant in Ruesselsheim, Germany. “With this aid, we believe that we can lead this company to a very profitable future.”  The plan will be presented to the German government Monday, he said. Opel would like to become fully independent of GM, but it will need taxpayer money to stay alive.        Breaking News

Saab will go on without GM

Carmaker Saab, which is owned by General Motors, has had its application to enter a reorganisation process approved by a Swedish court.

An administrator has been appointed to handle the process. Saab is seeking to create a fully independent business.

GM has said that it wants to sell Saab. There had been concerns about the loss-making carmaker after the Swedish government rejected GM’s call for aid.

GM took a 50% stake in Saab in 1989 and gained full ownership ten years later.

Any restructuring would need the approval of Saab’s creditors, who meet on 6 April.        Breaking News

Ford benefits from GM and Chrysler’s stumble

Union Givebacks, Rising Market Share Are Tied to Rivals’ Bad News; Why Some Shoppers Switch to Ford

Ford Motor Co., which hasn’t taken a dime of government bailout loans, is benefiting from the troubles of its two cross-town competitors in Detroit, General Motors Corp. and Chrysler LLC.

GM and Chrysler are required to seek cost concessions from the United Auto Workers union under the terms of their federal loans. That allowed Ford to open parallel talks with the UAW, which has a history of working out the same conditions at each company.

This week, Ford and the UAW reached an agreement to cut pay for laid-off workers, ease work rules and eliminate wage increases tied to the cost of living — two days before GM and Chrysler reached the same deal.

At the same time, while GM and Chrysler have been hit with a steady stream of negative news — including growing concern they may need to file for bankruptcy protection — Ford has been having more success at luring away its competitors’ customers.  Ford’s share of the U.S. retail market rose in each of the past four months, while GM’s and Chrysler’s fell, Ford said.        Breaking News

Michigan: struggling with GM’s restructuring plan

LANSING, Michigan (CNN) — Sherrill Freeborough has a disarming smile, an optimistic spirit and an uncertain future.

She owns two Saturn dealerships in the Lansing area, but will lose her partnership with General Motors in three years because the automaker is discontinuing the Saturn and Pontiac brands as part of its restructuring plan.

“I am a small business owner,” Freeborough told us during a visit to one of her showrooms. “Everything I have I have put into the dealerships, my home — everything is in the company. … My husband still can’t breathe. He still asks ‘what are we doing? I thought you were just going to sell cars.’

“So, yeah, everything in my life,” Freeborough said. “I can’t have a bad day and go home and tell him. I have to be happy when I go home because everything we have is wrapped up in this company.”        Breaking News

The demand for gas is creeping upward, pushing up oil prices

Months after soaring fuel prices spurred U.S. drivers to cut back on their driving, demand for gasoline is slowly coming back, helping to push up depressed oil prices.

Demand for gasoline has nudged up above last year’s levels for the past couple of weeks, government data released Thursday show. Gas prices have been hovering under $2 a gallon since November, but now that they have been low for a while, consumers might be getting bolder about their gasoline use, analysts say.

In response, refiners who had dramatically curtailed production have begun ramping up gasoline output, drawing an additional 16,000 barrels of oil a day from storage last week, compared with the previous week. The nation’s oil stocks, which had been swelling to record levels, dropped last week for the first time in almost two months, driving crude-oil futures up $4.86, or 14%, to settle at $39.48 a barrel Thursday after two days of declines.        Breaking News

Bankruptcy will not solve the automakers problems

Experts say taxpayers would be saddled with much higher costs

With U.S. automakers asking for billions more dollars in aid from the U.S. government, it’s worth asking something that was almost unmentionable just a few months ago: Shouldn’t General Motors and Chrysler just file for bankruptcy?

On Tuesday evening, meeting a deadline to file viability plans with the U.S. Treasury Department, GM and Chrysler asked the government for up to $21.6 billion in additional government loans by March 31 to survive the current recession.

The funds would come on top of the $17.4 billion allocated to the automakers in December. The automakers’ new requests were accompanied by plans for thousands more job cuts, slashing of models and brands, union concessions and the prospect of even further expense cuts       Breaking News

Automakers should be held accountable, says customers

(CNN) — Tracy Dupire of Worthington, Indiana, loves to drive her 2002 Ford Mustang convertible with the top down when the weather is nice. She’s always had an American car and hopes she always will.

“It’s hard to rationalize sending all of our money overseas. You have to buy American products and back American workers,” says Dupire.

The question of value in American-based auto-manufacturers is coming to a head as President Obama advocates for a bailout of two of the Big Three auto manufacturers and asks the companies to present a plan for progress.

General Motors and Chrysler requested a combined $21.6 billion Tuesday on top of existing federal loans due to worsening demand for cars and trucks. Ford said it has enough money for the time being to make due without the bailout.        Breaking News

GM and Chrysler: more money, fewer jobs, fewer brands

Saturn, Hummer Could Be History by 2011 as GM Plans to Slash 47,000 Jobs; Chrysler Mentions Bankruptcy Option for First Time

General Motors Corp. and Chrysler LLC on Tuesday told the federal government they need at least $21.6 billion more combined in bailout loans to put them on the road to recovery, and outlined possible scenarios if either auto maker should have to file for bankruptcy protection.

GM, in a 100-plus page report submitted to the U.S. Treasury, argues that bankruptcy would be more costly and drawn out than a government-funded restructuring.

GM said it might need as much as $100 billion in financing from the government if it were to go through the traditional bankruptcy process. Rick Wagoner, GM’s chairman and chief executive, said the bankruptcy scenarios are “risky” and “costly” and would only be pursued as a last resort.        Breaking News

Restructuring plans release by GM and Chrysler

General Motors Corp. on Tuesday said it will need as much as $16.6 billion in additional aid from the U.S. government and could run out of money as soon as next month if it doesn’t receive at least some of that funding.

The largest U.S. auto maker, surviving on $13.4 billion in emergency loans granted in recent months, laid out a plan to close more factories, eliminate thousands of dealerships and slash 47,000 jobs this year around the world.   GM, however, said it failed to strike critical deals with the United Auto Workers union and bondholders to reduce labor costs and shrink its $47 billion debt load. Negotiations with both parties are expected to continue.       Breaking News