UPDATE: GM Gets Defensive On Blog Over Viability Doubts
March 06 2009 - 3:11PM
Dow Jones News
General Motors Corp. (GM), in response to its auditors casting
doubt on its viability plan, said on its corporate blog that it
still believes its restructuring will lead to long-term
success.
GM's continuing losses and inability to generate cash for
continued operations led auditors from Deloitte and Touche to
determine there was substantial doubt that the company can survive.
GM admitted many factors, some of which are out of its control,
contribute to its uncertain future, but maintained its vision for
long-term prosperity.
"We acknowledge the challenges and risks that face us today, but
we're still going forward with our plan, we're still making the
best cars we've ever built, and we're still rebuilding our company
for long term viability," Steve Harris, vice president of global
communications, wrote on GM's FastLane Blog on Thursday night.
He noted the viability plan will position GM "not just for
survival but success" as the market recovers and global auto sales
reflect a strengthening economy.
"I know, some will say that this sounds like corporate-speak.
But what does anyone expect - that we'll pick up our marbles, say
'They're right,' and go home? Sorry we're planning on being
around," Harris added.
GM executives have used the blog in recent weeks to describe to
the public details of its restructuring plan and explain why
bankruptcy isn't the best option for its future. Several blog posts
have also attempted to correct ways in which it felt it's been
misrepresented in the media.
GM previously said it could cost as much as $100 billion to
restructure and emerge from bankruptcy. But The Wall Street Journal
reported Friday that top executives may now be more willing to
accept a speedy bankruptcy reorganization financed by the
government.
Harris posted a follow-up blog entry on Friday afternoon, saying
GM hasn't changed its stance on bankruptcy.
"Restructuring the business out of court remains the best
solution for GM and our constituents," Harris said.
He noted GM has analyzed various bankruptcy scenarios, but still
firmly believes that an in-court restructuring would carry
tremendous risks, including "a dramatic deterioration of revenue
due to lost sales."
"That's the deal, folks. We haven't changed our thinking. You
analyze every option, but you move ahead with the one you think is
best for the company. That's what we're doing," he said.
GM shares, which have lost more than 90% of their value over the
last year, were recently down 23% at $1.43.
"We understand all too well the challenges we face at this time
and in this truly difficult economy," Harris said. "But we're not
giving up, we're not giving in, and we sure aren't planning on
going away."
-By Steven Russolillo, Dow Jones Newswires; 201-938-2205;
steven.russolillo@dowjones.com