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.