GM losses mount
Wagoner, 56, will be in Washington to meet with President Barack Obama’s auto committee after reporting an annual operating loss estimated at $26.83 a share and a quarterly shortfall of $7.85, according to 10 analysts surveyed by Bloomberg. GM said Feb. 17 it needs at least $2 billion in additional loans next month or it will run out of cash.
The GM shortfall will accentuate the needs at the largest U.S. automaker as it struggles to endure losses totaling $73.1 billion since the end of 2004. A collapse in U.S. sales and eroding demand outside the U.S. have forced GM to seek as much as $16.6 billion in new aid to stay in business.
“It shouldn’t be difficult for them to demonstrate things are really bad," said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co. in Memphis, Tennessee. “It will be much more difficult for them to convey that there is a case for restructuring outside of bankruptcy. They are walking a fine line."
GM is cutting 47,000 jobs this year, closing an additional five U.S. plants by 2012 and selling or shuttering its Saab, Hummer and Saturn brands as part of a restructuring campaign to keep government loans and start paying them back in 2012. GM is also cutting pay for many salaried workers and seeking debt and labor-cost concessions.