We all knew that GM was in a bad way. After all, it has just presented a ‘viability plan’ to the US government that made clear it would need $30bn (£21bn) in loans to stay upright.
Today’s announcement of its 2008 losses, though, has only underlined GM’s extremely parlous state. Financial reports say that GM also ‘burned through’ $19bn (£13.3bn) in cash in 2008 and expects to consume another $14bn (£9.8) in 2009.
As if making a fourth quarter loss of $9.6bn (£6.7bn) wasn’t bad enough, the company says its pension fund has tumbled into a £12.4bn (£8.7bn) deficit. Alarming, when the company says the fund was $20bn (£14bn) in surplus only last year.
Perhaps more worrying is an estimate out today from the JD Power consultancy. It says that this February, ‘annualised’ US new car sales will fall to just 9.1m units.
We should hope that February’s sales figures do not become truly ‘annualised’. Chrysler’s own viability plan estimates that annual new car sales of just 9.1m units is point at which the US car industry is ‘no longer viable as currently structured’.
That, I think, is shorthand for ‘no amount of government money will be able to bail us out’. The global car industry must hope the US public can dig deep and keep new cars sales in 2009 well above the 10 million mark.