Stick a fork in General Motors

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Auditors aren't always right, but if they have even a small clue right now, General Motors is almost done. GM filed its most recent annual report today with the Securities and Exchange Commission, and in it is something called a "going concern" problem. Essentially the auditors have given an opinion that the company isn't likely to be able to continue in business for much longer.

The company logged a $30.9 billion loss for 2008. It has received $13.4 billion from the U.S. taxpayers to help weather the storm, but at the rate GM is going, that clearly doesn't even put a dent in the company's money problems.

Over the last three years, GM's losses have totaled $82 billion, and the prospects for the future are grim. Sadly, American automakers have a business with a cost structure that can't be profitable in this economy. No amount of welfare from the taxpayers will change that fact, and it's only a matter of time before GM, Ford, and Chrysler will be forced to completely change the way they do business or go out of business all together.

Simple cost-cutting by eliminating jobs and closing factories isn't enough either. There are too many other costs associated with running these companies -- in large part the benefits owed to retirees -- that are dragging them down. GM has until March 31 to demonstrate to the federal government that the business is viable, but I'm doubtful that it can actually achieve profitability. Bankruptcy is the next step, and we should all hope that the government doesn't waste more taxpayer money trying to put off the inevitable.
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