Auditor Report Warns GM Survival 'Doubtful'

March 5, 2009— -- General Motors auditors have looked at the company's dismal sales and its crushing debt and sky-high costs and said that the current factors "raise substantial doubt about [GM's] ability to continue as a going concern."

It may be hard to imagine a more grim report: Despite already cutting thousands of jobs, pledging to eliminate three brands and receiving more than $13 billion in government loans, GM -- one of the Big Three U.S. automakers -- is still on the brink.

The company is seeking nearly $17 billion more in government aid to keep running. But today's 402-page annual report said that even an influx of government cash may not be enough to keep GM in business.

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Unless the union is more flexible when it comes to how the company contributes to a worker's health care and consumers start buying more cars, the auditors say it will be hard for the company to avoid a spiral into bankruptcy.

"There's still a risk that GM could liquidate, because no amount of government bailout money is going to force consumers to go into a GM showroom and buy a car," said David Whiston, an analyst at Morningstar Mutual Funds.

On Wall Street today, confidence waned as GM stock fell to $1.86 a share -- about the cost of a gallon of gas. Despite today's report, the company remains determined to avoid bankruptcy.

In a statement, it said that the results of today's report were "not unexpected" and that GM plans to continue its efforts to emerge stronger.

"The auditor's opinion has no impact on the aggressive actions we are taking to restructure our business for long-term viability," it read.

GM chairman and chief executive Rick Wagoner echoed that message.

"Our focus right now is taking the restructuring actions we need to accomplish this out of court," said Wagoner.

The company also revealed today that amid the worst auto sales climate in 27 years, Wagoner had received a pay package of $14.9 million in 2008. Last year, GM lost $30.9 billion.

It remains unclear if America's biggest automaker will be able to successfully implement its restructuring plan.