GM auditor's "substantial doubts" could raise further opposition to federal bailout.
Are there simply too many cracks in the foundation for General Motors to survive? There’s clearly more reason to doubt the company’s viability, today, in the wake of a gloomy report from the company’s own auditors, which raises “substantial doubt” about GM’s ability to remain in business.
That is, of course, no surprise to GM’s many critics, including those who have actively worked to try to prevent the Obama Administration from approving $16.6 billion in additional assistance, on top of the $13.4 billion the automaker has already received in emergency loans.
The latest concerns, raised by the auditing firm, Deloitte & Touche LLP, certainly won’t help. The irony is that the questions are being raised in GM’s own annual report. Deloitte serves as GM’s auditors, and its analysis and guidance is a central part of the yearly statement, which is filed with the Securities and Exchange Commission and supplied to investors. To be fair, in the current global meltdown and credit crunch there are doubts about the viability of many automakers.
Last year, GM ran up $30.8 billion in losses, bringing to $82 billion the total red ink for the past three years. According to its auditors, the company’s losses, and its inability to raise more cash in the continuing – and potentially worsening – economic crisis translates into a “substantial doubt” about GM’s ability to remain a viable concern.
“There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn,” the company’s statement said.