DETROIT, March 18: General Motors Corp. shares and bonds fell on Friday after the automaker increased its 2005 loss by $2 billion due to accounting errors, raising questions about the company’s management and renewing doubts about its long-term survival.

GM’s board of directors held an unscheduled discussion on Friday in the wake of the disclosures, the Wall Street Journal said, citing a person familiar with the matter. A GM spokeswoman had no comment on the report.

Analysts said the accounting problems further tarnished GM’s reputation with investors, who were already wary of the automaker’s eroding market share and high labour costs.

A delay in filing GM’s annual report also undermined confidence despite signs GM was moving to settle a labour problem involving former unit Delphi Corp., analysts said.

I think this will make investors skittish, said S&P equity analyst Efraim Levy, who reiterated a “sell” rating on GM. He called the missteps embarrassing for an industry which used to have a reputation as “pretty clean and transparent.”

The disclosures were also seen as potentially complicating GM’s efforts to sell a majority stake in GMAC to raise cash and improve the credit rating of its finance arm.

Is this another blow to management? I would say yes, said Argus Research analyst Kevin Tynan. But you can’t say management was on very steady ground in the eyes of investors. —Reuters