General Motors Corp. lost $9.6 billion in the final quarter of 2008 as it suffered a 26 percent drop in car sales, the company said Thursday as its executives prepared to ask the government for billions of dollars in additional loans.
GM Chief Executive Rick Wagoner, who already has accepted $13.4 billion in government aid for his company, was in Washington on Thursday to talk to the Obama administration about a request for up to $30 billion.
The nation's largest automaker said it expects an opinion from its auditors as to whether the company remains a "going concern" when its annual report is issued in March. That means the auditors will determine whether there is substantial doubt about the company's ability to continue operations.
GM Chief Financial Officer Ray Young said the deep loss for the quarter reflected how a slump in auto sales that began in the U.S. market had become a global crisis by year's end.
"When we talk about contagion, what we saw was that the credit crisis was starting to spread," Young told reporters on a conference call.
The company posted a net loss of $30.9 billion for 2008, the second-largest annual loss in GM's 100-year history, behind the $38.7 billion it lost in 2007.
It also warned that its pension plans for hourly and salaried workers were underfunded by about $12.4 billion as of the end of 2008.
During the fourth quarter, GM burned through $6.2 billion in cash and ended December with $14 billion in cash and liquidity, including the first $4 billion in loans received from the U.S. Treasury.
GM Chief Operating Officer Fritz Henderson has said that without the government loan payouts coming on the agreed schedule, the automaker would have already run short of the cash needed to finance its operations.
Like its smaller rival Chrysler LLC, GM faces pressure to wrap up concession talks with the United Auto Workers union on how to cut money promised to a health care trust fund.
GM's has offered the UAW up to $10.2 billion in new equity in order to give up a cash claim on half of the $20.4 billion it is owed for the trust fund.
The autoworkers' union reached a deal with Ford Motor Co. this week on terms to restructure its own retiree health care debt to the union on similar terms.
From wire service reports.