General Motors said it expects auditors to cast doubt on its ability to remain viable as it endures the worst market in decades. Posting a deeper-than-expected quarterly loss as revenue plunged by more than a third, the automaker said it could receive a "going concern" notice from its auditors.
It will be interesting to see how the auditors, in assessing GM's viability, value the billions of dollars of government bailout injections. The automaker has asked for up to $30 billion in aid and says it can't survive without it.
GM argues it is turning the corner on efficiency, production design and quality, but that may be an even harder computation for auditors to crunch than state support.
On 27th February GM posted a net loss of $30.9 billion for 2008. That would be a record for the 100-year-old company, except it lost $38.7 billion in 2007. Analysts have said the key to valuing GM shares and debt is the progress the company is making in talks with creditors and the autos task force assembled by President Barack Obama to slash debt and secure new funding.
The question of whether GM is a going concern -- is that a foregone?
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