GM raises bankruptcy fears in latest SEC filing

General Motors and its auditor, Deloitte & Touche, have expressed doubts over the automaker's ability to survive, which in part will depend on car sales rising next year. The embattled automaker made the disclosure in a 480-page filing with the US Securities & Exchange Commission (SEC).

GM has sustained large and continuing losses, while saying it needs additional federal loans to remain in business. Thursday's statement from the company's auditors presents another hurdle the automaker will have to clear as it makes the case that it deserve additional taxpayer support going forward.

The Obama administration, under the terms of the $13.4 billion in federal loans GM has already requested, must determine that the company's plans make it viable in the long run. The government must determine that GM has a "positive net present value" or else demand repayment of the loans within 30 days - a development that would almost certainly plunge the company into bankruptcy and quite possibly force it out of business.

But the government has wide latitude in how it judges the company's net present value, based on assumptions it makes about future sales, car prices and costs for the company going forward. The administration clearly does not want to force the largest US automaker into bankruptcy.

The GM filing disclosed that the Treasury already agreed to waive requirements that the automaker meet certain terms of the original loan agreement, including that it win agreement with creditors to convert two-thirds of its unsecured debt to equity by 17 February.

Privately held Chrysler does not have to file a year-end financial statement with the SEC. Last week, Ford Motor said its auditors have not substantial doubt about its future. Ford went into this auto crisis with a much stronger cash position than GM or Chrysler.