DETROIT — The automaker General Motors said Thursday that its cash reserves were down to $14 billion at the end of 2008, a year when the industry’s worst sales slump in decades nearly forced the company into bankruptcy before the federal government gave it a lifeline.þþGM lost $30.9 billion, or $53.32 a share, in 2008 and spent $19.2 billion of its cash reserves. þþFor the fourth quarter, it lost $9.6 billion, or $15.71 a share, as its global sales fell 26 percent. It spent $6.2 billion of its reserves — $2 billion a month — in the fourth quarter alone. The company has said in the past that it needed a minimum of $11 billion to $14 billion in reserves to finance operations, but the estimates were made before the recent drop in auto sales and cuts by G.M. in response. þþIn 2007, the company lost $43.3 billion, a record, mostly the result of a noncash accounting charge; it adjusted the figure higher by $4.6 billion on Thursday.þþThe losses, though, are unlikely to shake investors, who have already realized the automaker’s perilous state. G.M., which has borrowed $13.4 billion from the government since December, said last week that it might need as much as $30 billion to complete the restructuring plan that it has submitted to the Treasury Department.þþThe $14 billion that G.M. had on hand in December included the $4 billion of federal assistance that it had received at that time, meaning that the company would have been below its minimum level without the cash. An additional $9.6 billion was disbursed to G.M. in January and February. þþExecutives have repeatedly insisted that the company’s best option is to restructure outside of bankruptcy. G.M. estimated last week that it would need nearly $100 billion to finance a bankruptcy reorganization.þþG.M.’s reported 2008 revenue of $149 billion was 17 percent lower than the previous year’s revenue of $180 billion. Global sales fell 11 percent in 2008, its centennial year, making Toyota of Japan the world’s largest automaker and ending G.M.’s 77-year reign at the industry’s pinnacle.þþExcluding one-time charges, G.M. lost $16.8 billion last year, or $29 a share. Its fourth-quarter operating loss was $5.9 billion, or $9.65 a share, worse than the per-share loss of $7.40 that analysts were expecting, on average.þþIts revenue in the fourth quarter fell 34 percent to $30.8 billion. þþG.M.’s global automotive operations lost $10.4 billion last year, compared with a $553 million profit in 2007.þþIt lost $2.1 billion in the quarter in North America, the most troubled market, compared with $1.1 billion in the final months of 2007. It reported losses in all of its other geographical regions, as well, þþGMAC Financial Services, the automaker’s lending arm, had a fourth-quarter profit of $7.5 billion, though it would have lost $4 billion without a bond exchange in December.þþShares of G.M. have lost 89 percent of their value in the last year, touching a 74-year low of $1.52 last week before rebounding.þþG.M.’s chief executive, Rick Wagoner, is scheduled to meet Thursday with members of the auto industry task force created this month by President Obama. The panel, led by Treasury Secretary Timothy F. Geithner and Lawrence H. Summers, the White House economic adviser, will oversee the restructuring at G.M. and Chrysler.þþ“2008 was an extremely difficult year for the U.S. and global auto markets, especially the second half, ” Mr. Wagoner said Thursday in the earnings statement. The conditions “led us to take further aggressive and difficult measures to restructure our business.” þþ“We expect these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions,” Mr. Wagoner said. þþChrysler has borrowed $4 billion and wants an additional $5 million next month. Its executives met with the task force Wednesday.þþMr. Obama, in his address to Congress on Tuesday, expressed a commitment to the auto industry, saying that “millions of jobs depend on it” and that the country “cannot walk away from it.” But he and his task force have not indicated whether they would favor giving the companies more money.þþG.M. is pressing for concessions from its bondholders and the United Automobile Workers union to reduce its debt and cut expenses. The U.A.W. last week agreed to a deal on many issues, but talks on retiree health care are continuing. G.M. wants to substitute its stock for up to half of the multibillion-dollar payments it must make into a health care trust, which would be similar to an agreement the union reached with the Ford Motor Company several days ago.þþThe terms of G.M.’s loans from the government require it to obtain the concessions. It must show progress in its restructuring by March 31 or risk having the loans it already has received called back.þþAs part of its restructuring, G.M. says it will cut three of its eight brands — Saturn, Hummer and Saab — and turn a fourth, Pontiac, into a niche brand with fewer models. Hummer is expected to close by the end of March if a buyer cannot be found, and Saab filed for bankruptcy protection in Sweden last week after that country balked at providing aid.þþSaturn will be phased out by 2012, unless its dealers or another entity come up with a plan to save the 24-year-old division.þþFord, in contrast to G.M. and Chrysler, has not taken federal aid, but it has been seeking concessions from the union and other stakeholders nonetheless to improve its financial health. Ford, which lost $14.6 billion in 2008, the biggest annual loss in its history, is extending more buyout and early retirement offers to its hourly workers and is eliminating performance bonuses for salaried workers for the second consecutive year.þþG.M. is offering 22,000 of its retirement-eligible hourly workers $20,000 plus a discount voucher worth $25,000 off a new vehicle if they leave by April 1.þþ
Source: NY Times
