In GM’s 2008 10-K, filed this morning, Deloitte’s audit opinion contained a “going concern” clause:
The accompanying consolidated financial statements for the year ended December 31, 2008, have been prepared assuming that the Corporation will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, 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. Management’s plans concerning these matters are also discussed in Note 2 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Furthermore, Deloitte’s 404 opinion on internal controls states that GM did not maintain effective internal controls due to a “material weakness related to ineffective controls over the period-end financial reporting…”
GM Auditors Raise Warning On Bankruptcy Risk : NPR
Although GM has warned for weeks that its cash-flow position was being eroded, Thursday’s announcement in an annual report filed with the U.S. Securities and Exchange Commission shows the full gravity of the situation as auto sales plummet to their lowest levels in more than a quarter century and revenue continues to drop sharply.
GM has already taken $13.4 billion in government loans, but the company has been unable to cut costs fast enough to stop the bleeding. Executives say they need another $16 billion to survive.
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