GM posts wider loss, burns through $5.2 billion in cash

From Automotive News:
By Jesse Snyder


General Motors, battered by a global economic collapse and buoyed by U.S. rescue loans, posted its sixth straight quarterly loss and burned through $5.2 billion in cash as revenue shrank 34.2 percent.

The net loss of $9.6 billion in the fourth quarter compares with a loss of $1.5 billion a year earlier. The operating loss was $5.9 billion. Revenue fell to $30.8 billion from $46.8 billion.

The loss sealed CEO Rick Wagoner's fourth straight year without a profit and reflect the distress that GM showed last week when it asked the U.S. Treasury for as much as $16.6 billion in additional U.S. aid. GM, which has received $13.4 billion so far, said the request reflected a market that was deteriorating more rapidly than anticipated.

"2008 was an extremely difficult year for the U.S. and global auto markets," Wagoner said in a statement. "We expected these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions."

GM ended the quarter with $14 billion in cash. In GM's last quarterly report in early November, GM said it was close to exhausting its cash supply. The automaker then petitioned Congress for help, was rejected by the Senate and bailed out by lame-duck President George W. Bush.

This year, GM has officially yielded the global sales title to Toyota Motor Corp., which itself is about to post its first annual operating loss in 70 years. GM recorded a 49 percent sales decline in January U.S. sales, as demand sank to its lowest mark since 1981.

GM's fate now rests with a task force appointed by President Barack Obama, who told Congress this week that the Detroit 3's ills were largely self-inflicted as he pledged to help create an industry that "can compete and win."

Wagoner was scheduled to meet later today with the task force, headed by U.S. Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers.

GM, like smaller rival Chrysler LLC, faces pressure to wrap up concession talks with the UAW on how to cut funding promised to a health-care trust fund. Chrysler has received $4 billion in U.S. loans and seeks $5 billion more.