The European Commission had an emergency meeting to discuss the matters of the automotive industry which had been severely hit by the recession and could cause the end of General Motors. They simply did not accept the way GM had reacted to the ongoing crisis and were in fear of being too late to set things right.
But what do the figures show for General Motors? According to their auditors the company is in a desperate situation as it had a loss of approximately 31 billion dollars just last year and the situation for 2009 would be far from being rosy, either. GM’s shares have gone down with at least 15% so far. If the company goes bankrupt, it will cause job losses for 300,000 European citizens. So as not to let it happen the EU expects European governments to come up with a solution to give aid to GM so that the company will not run out of money by the end of this spring. Mainly those EU countries that have GM sites or GM-related plants within their borders are expected to react to this dire situation: Britain, Belgium, Poland, Germany, Spain and Sweden.
What is definitely out of question is that General Motors will cut almost 50,000 jobs and will require at least 22 billion dollars to survive in the near future. So far the company has received a 13 billion dollar federal loan to fight the “worst vehicle sales market” in three decades. Auditors wrote in their annual report that "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.” The company’s sales decreased by 53% compared to last year’s figures. In its annual report GM says: „Our future is dependent on our ability to execute our viability plan. 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.”
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