That's the difference between the cost of maintaining GM's $1 per share annual dividend ($567m) and the company's so-called "free cash flow" (.33 cents a share or $189m). As Bloomberg reminds us, GM cut its dividend in half– from $2 to $1 per share– in February '06. At the time, talk of bankruptcy was in the air and on CNN ("And yet the evidence points, with increasing certitude, to bankruptcy.") GM was well into it current market share decline, having lost some $8.6b in NA the year previous. But hey, given GM's recent $1b per month cash burn, what's $387m between friends? That said, if you want proof that the ailing American automaker is still in denial/maintaining a brave face regarding its cash conflagration and North American market share tumble (down from 26 percent in '06 to around 20 percent now), look to see if CEO Rick Wagoner eliminates the dividend at his turnaround hoe-down later today. And then duck, lest a flying pig hit you in the head.
3 Comments on “GM $1 Share Dividend Costs $387m Per Year...”
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This might save that $387m/year: NY Times has a rumor about Hummer possibly being discontinued. We’ll see.
EDIT: for sale? Mr. Tata, opportunity knocks.
GM’s greatest product are its dividends for its most precious customers – the shareholders. What does GM do exactly?
Richard Chen :
June 3rd, 2008 at 8:59 am
This might save that $387m/year: NY Times has a rumor about Hummer possibly being discontinued. We’ll see.
EDIT: for sale? Mr. Tata, opportunity knocks.
Here’s GM’s press release on the subject:
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewpressreldetail.do?domain=2&docid=46161
Strategic assessment for Hummer brand
Finally, GM is undertaking a strategic review of the Hummer brand to determine its fit within the GM portfolio. At this point, the company is considering all options, from a complete revamp of the product lineup to a partial or complete sale of the brand.
I don’t know who the hell would buy it. It’s not worth anything, basically.