BUSINESS BRIEFS
GM audit finds 'substantial doubt'
Advertiser news services
DETROIT — Of all the words in General Motors Corp.'s 402-page annual report, none is more jarring than two written by the company's auditors: "substantial doubt."
The doubt, according to Deloitte & Touche LLC, is about whether GM can overcome its staggering losses and generate enough cash to stay in business, or remain a "going concern," as accountants would say.
GM concedes in the report filed yesterday that it's on the edge of bankruptcy and won't be able to avoid it unless it gets more government money and successfully executes a huge restructuring plan.
However, Ray Young, GM's chief financial officer, said yesterday that GM can accomplish its restructuring goals without bankruptcy.
The company is making progress in negotiations to swap debt for stock and to gain concessions from the United Auto Workers union, he said.
RETAIL SALES FALLING AT A SLOWER PACE
NEW YORK — After hibernating since last fall, shoppers may be carefully crawling out of their caves to restock their pantries and buy a few more necessities.Retailers released figures yesterday showing that sales kept falling in February, but at a slower pace than in January — possibly indicating that business could be stabilizing. But analysts say that's hardly enough to call the beginning of a recovery.
They caution that the better-than-expected reports were helped by better inventory control and point to Wal-Mart's surging sales as a sign that more people may simply be shifting their spending to cheaper stores. The rift between discount stores and luxury merchants widened in February as shoppers kept worrying about the economy.
TOP EUROPEAN BANKS CUT RATES
LONDON — Europe's two leading central banks cut interest rates to record lows yesterday to boost their recession-mired economies, but as rates near their floor, all eyes turned to a radical alternative move by the Bank of England to effectively create new money.The half a percentage point cuts by both the European Central Bank and the Bank of England took rates down to 1.5 percent and 0.5 percent as both banks battle to stimulate growth amid lower consumer spending, rising unemployment and falling exports.
ECB President Jean-Claude Trichet said there was a "consensus" on the bank's governing council over the decision to cut and added that the bank could go further, though he did not provide a clear sign another rate cut would be enacted next month.
