LONDON (MarketWatch) -- General Motors said in a 10-K filing that there's substantial doubt over its ability to continue as a going concern. Its auditor, Deloitte & Touche, also expressed those doubts. GM had previously flagged that a review of whether it was viable would come in the 10-K filing. "Our independent public accounting firm has issued an opinion on our consolidated financial statements that states that the consolidated financial statements were prepared assuming we will continue as a going concern and further states that our recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern," GM said. "If we fail to [execute the Viability Plan successfully], we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code." The plan is contingent that vehicle sales will decline further in 2009 but begin to recover in 2010

Auditors: 'Substantial Doubt' GM Can Survive

In pre-market trading, GM shares fell 14 percent from Wednesday's close, to $1.90.

GM has received $13.4 billion in federal loans as it tries to survive the worst auto sales climate in 27 years. It is seeking a total of $30 billion from the government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.

The company faces a March 31 deadline to have signed agreements of concessions from debtholders and the United Auto Workers union to show the government it can become viable again. On Feb. 17 it submitted the restructuring plan to the Treasury Department that includes laying off 47,000 workers worldwide by the end of the year and closing five more U.S. factories.

GM said in its filing that its future depends on successfully executing the 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 U.S. Bankruptcy Code," the Detroit-based automaker said in the annual report.

GM, the report said, is highly dependent on auto sales volume, which dropped rapidly last year. "There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn," the company wrote.

GM has said it wants to avoid bankruptcy protection because it would scare off customers. Car buyers, the company has said, would be reluctant to buy from an automaker in bankruptcy protection due to fears that it wouldn't be around long enough to honor warranties or make replacement parts.

GM, in its viability plan submitted to the Treasury last month, said it explored three bankruptcy scenarios, all of which would cost the government more than $40 billion.

Chief Operating Officer Fritz Henderson said at the time that the government would be the only place the company could get financing for bankruptcy reorganization, because the credit markets are frozen. The worst-case bankruptcy scenario would cost the government $100 billion, Henderson said, because revenue would severely drop due to a lack of sales.

He said there is not a lot of research about whether people would buy cars from an automaker in bankruptcy protection, but "that which is there suggests that sales fall off a cliff."

GM warned last month that its auditors may raise the "going concern" doubts, and industry analysts said auditors' statements may trigger clauses in some of GM's loans, placing them in default.

But the company said in its filing that it has received waivers of the clauses for its $4.5 billion secured revolving credit facility, a $1.5 billion term loan and a $125 million secured credit facility.

"Consequently, we are not in default of our covenants," the report said. "If we conclude that there is substantial doubt about our ability to continue as a going concern for the year ending Dec. 31, 2009, we will have to seek similar amendments or waivers at that time."

GM spokeswoman Julie Gibson said there is no clause in the terms of the government loans that places them in default if the auditors raise doubts about GM's ability to keep operating.

"That was not a condition of the loan. It's not in the agreement," she said

GM delivers its latest request for more money

General Motors is teetering on the brink of financial chaos. GM says that its cash on hand is being depleted to levels where it will no longer be able to operate unless it gets $2B USD in additional loans at the end of March.

GM is pleading with the government to give it an expanded bailout, while President Obama and his staff are considering cutting GM off and letting it go bankrupt. GM has warned in the past that it cannot survive bankruptcy, and now it is "warning" the government yet again that it will go bankrupt without intervention and of the consequences that would have on the economy.

Its auditors are growing increasingly antsy as its losses pile up. They have issued a statement saying they have "substantial doubt" that GM will be able to continue to pay its debts. Initially they demanded GM repay $6B USD of credit, based on GM's announcement that it could go bankrupt and the company's growing financial problems. However, GM has brokered a deal with them to stay their hand while it seeks $30B USD in federal aid.

After losing $30.9B USD in 2008, GM's business units are in freefall. Sales have plunged by millions of units and the company is burning through billions in cash quarterly. With such a bleak outlook, it correctly warned that auditors Deloitte & Touche would question its ability to make payments, which according to its recent statements, they did.

The information was revealed in reports to U.S. Securities Regulators and a 25-page plea to the government. The plea explains GM's perspective that it is facing insurmountable hardship from tight credit, troubled suppliers, and sinking demand. GM hopes that the government will come to its aid, bailing it out once again.

GM is slashing brands left and right, but can't seem to stop its losses. Even if GM manages to muster enough cash to sustain its operations, it may still go bankrupt at the start of June, when one of its $1B USD convertible debentures matures. If it cannot find additional funds to make this payment, it will be forced into bankruptcy.

GM says that a bankruptcy would result in a liquidation of its assets -- in other words there would be no reorganization and no more GM. It insists that restructuring would be hopeless and consumers would be even less likely to buy from it and that it lacks enough assets to finance a full reorganization.

In order to even have its request for assistance considered, President Obama and his auto task force have demanded that GM convince the United Auto Workers and bondholders to reduce its debt load in order to show that it can be financially viable. GM writes in the annual Securities Regulators report, "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 U.S. bankruptcy code."

GM's future is now largely in the hands of automotive debt owners. Its creditors may begin to slash the credit lines of its suppliers, which could further damage GM's sales and production. Further, the creditors are opposed to the government plan, which asks them to convert $27B USD of the company's debt -- approximately a third of it -- to equity. They say they want government guarantees on their repayment of the remaining debt or they will make no deal. Government officials thus far have refused to make this guarantee as they don't want to be forced to pay these billions out of taxpayers' pockets if GM folds.

Globally GM's sales are down 24 percent,from a peak in January 2008 and in the U.S. they are down over 40 percent from their peak in 2007. GM has lost $82B USD since 2005. It says it may lose $1B USD for its trouble Saab unit, alone. GM recently started reporting Saab's revenue separately and hopes to sell the unit, if someone wants to buy it.