The following just landed in my in-box:
NEWS ALERTfrom The Wall Street JournalMarch 5, 2009
GM says in its annual report that its auditors have raised substantial doubts about its ability to continue as a going concern, citing recurring losses from operations, stockholders’ deficit and an inability to generate enough cash to meet its obligations.
GM has received $13.4 billion in federal loans, and the company 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
Apparently because I needed more sad irony with my coffee, my next few clicks brought me this from the NYT:
A “going concern” letter can be a bargaining tool for a company in discussions with its unions and other stakeholders who may resist concessions without proof of a company’s distress.
Ok, let’s start from the bottom.
First, let’s all agree that we have sufficient proof of GM’s distress. If fundamental weakness equates to negotiating strength, let’s rename them Goliath Motors.
Second, let’s pause for a refresh of the admittedly simplistic math we did back in early and late December. At the time, my point was that the $17.4 billion loan to Big Auto was a bridge to nowhere, and that–even if there were 3 million jobs in the balance–such a vast sum would be better spent on retraining those workers. Now, GM alone seeks another $30 billion–with absolutely no more believable plan to prove viability than it had three months ago. The backward-looking math is sad: shareholders and the public have spent $95 billion over the last three years, or over $30,000 per job, even if you pin all the jobs on GM. The taxpayers are being asked to spend another $10k per job.
Think about where those workers would be if there had been spent $40k apiece in retraining them? Well, it’s hard to think about, because you literally couldn’t spend that much without giving them more durable job skills–like wholesale PhD’s in English literature.
This has to be the time to stop the madness.
And finally, about the GM annual report. If the company actually did one of those dead-tree pieces of marcom, please–nobody tell me.