GM’s auditors are talking about bankruptcy for the automaker:
General Motors Corp.’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan.
The automaker revealed the concerns Thursday in an annual report filed with the U.S. Securities and Exchange Commission.
“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 the accounting firm Deloitte & Touche LLP wrote in the report.
Before this news, it was hard to imagine that the consensus view on GM’s viability could get worse — but it just did. With even the company’s auditors now raising the specter of bankruptcy, and with the company hemorrhaging cash, it’s hard to imagine that even Barack Obama and the Democrats in Congress will commit tens of billions to saving the company.
But even as lawmakers begin to face the prospect of taking GM off life support, its unions act as if nothing has changed:
The Canadian Auto Workers union said it will begin ” exploratory” concession discussions with General Motors Corp. (GM) in hopes of reaching an agreement by March 31.
“We have had discussions with Ford, GM and Chrysler over the past couple of weeks, but we committed to the government to work with GM and Chrysler to try and reach an agreement before the end of March,” CAW President Ken Lewenza said Thursday. “We are trying to play our part in being a part of the solution.”
Lewenza said he doubts the discussions will result in the lowering of union wages. He also expects GM to keep its current presence in Canada and hopes that any deal with GM will be the pattern for the other auto makers…
“The worst GM can do is be overzealous,” Lewenza said. “If they get overzealous and look to push wages back, then we could have a problem.”
There could be a problem. I’m sure that will make GM back off — the last thing they want to do is make the union angry, right? Better just to back off, to save money by turning off some of the lights and dropping the temperature in the corporate offices to 68. Then in a few months, after GM has been completely shut down, the unions might consider concessions.
You’ve got to tip your hat to a group so obstinately and blindly willing to kill the golden goose.
Right now it’s hard to justify keeping General Motors alive, and if even this existential crisis is not enough to get the unions to budge, why lift a finger? How could GM succeed going forward with such a cavalier attitude on the part of the company’s workers?