GM Wants A Bigger Line

Bertel Schmitt
by Bertel Schmitt

GM must feel like well-to-do Eurotrash coming to America: Lots of cash in the bank, but lousy credit. GM wants to change this and is talking to banks about doubling its $5 billion line of credit, the Wall Street Journal says.

GM currently sits on a $33 billion cash pile, far in excess of the $20 billion analysts believe it needs to operate comfortably. Says the Journal:

“But GM could have hefty cash needs ahead. Its European operations are racking up major losses, it is increasing capital spending on new vehicles, and it may want to repurchase shares held by the U.S. Treasury. GM also wants to reduce its U.S. pension obligations. Pensions for hourly, union workers and retirees are underfunded by about $10 billion and have been a major concern for investors.”

GM secured a $5 billion revolving line of credit in 2010. Ford’s line is $9.3 billion.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • CliffG CliffG on Aug 25, 2012

    I probably wouldn't recommend you or me to loan them a bunch of money, but if I was running one the TBTF* banks I am not sure what the risk would really be. *Thank you Mr.Bernanke and Mr. Geitner. And, of course your 55th floor window office awaits when you decide to take a few years off in the private sector.....

  • Axual Axual on Aug 26, 2012

    GM still owes taxpayers billion of dollars. Pay it back. I will never purchase a GM vehicle because of what they've done. It's disgusting that that executives did not take the responsibility for their piss poor decisions over decades and been forced to file bankruptcy so they were on the hook for their decisions.

    • See 1 previous
    • Jkross22 Jkross22 on Aug 27, 2012

      @ihatetrees If GM did the hard work required of a real bk, you would have a point. But then, if GM did the real work to begin with, they would not have found themselves in a position to go bk in the first place. Their faux bk fixed little other than rewarding the destructive behavior that got them there and wiping away debt they legitimately owed.

  • Fred diesel Fred diesel on Aug 26, 2012

    Not sure $5B will cover it. Every GM dealer I walk in to has the techs up to their elbows in warranty V6 fixin. What POS.

  • Inside Looking Out Inside Looking Out on Aug 26, 2012

    So company goes bankrupt and secured bond holders get trashed. But taxpayers still on the hook to pay additional 10 billions of US dollars to provide pensions and comfortable lives to those who bankrupted the company in the first place and did not take any responsibility. So they sucked out tens of billions $$ first time and still not satisfied. Doesn't it remind you Underworld? But yes - everybody, let us help union thugs to elect you know whom for the second term of you know what because they will desperately need him.

    • See 1 previous
    • Inside Looking Out Inside Looking Out on Aug 28, 2012

      @Pch101 I never lived in you little happy world of crony capitalism so I do not care if you kick me out. If bond and share holders were treated so well in GM bankruptcy then go and invest into GM shares or loan them your personal money. You will be rich guy (if not already). But leave me alone with my hard earned money.

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