Auditors have raised serious doubts about General Motor Corp.'s ability to survive amid an unprecedented shortage of new car buyers. GM recently received $13.4 billion in federal loans; however, the automaker says it might need another $22.6 billion in government loans to survive.
The Detroit carmaker has incurred $82 billion in losses in the past three years, including a $30.9 billion loss in 2008. The company has also announced plans to close 14 plants by 2012.
The major US automaker also has plans to cut 47,000 jobs in 2009.
"The corporation's recurring losses from operations, stockholders' deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern," auditors for Deloitte & Touche wrote in their annual report.
GM's chief operating officer Fritz Henderson said that European governments must act without delay to ensure the European divisions of the company does not run out of money by April or May.
"If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the US Bankruptcy Code," GM said in its annual report filed with US securities regulators. "There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn," the company expounded.