GM Marketing Mark LaNeve's Email to Dealers: Don't Worry, Be Happy
Dear GM Dealers:
Last week, I sent you a note asking you for your support for the Advanced Technology Vehicles Manufacturing Incentive Program legislation. I wanted to thank you for the response you have shown to date and ask you to continue that effort. I also wanted to let you know about additional developments regarding GM’s liquidity position.
We’ve seen unprecedented upheaval in the global capital markets and GM is responding to ensure its ongoing access to capital to fund operations and the North America turnaround.
First, GM agreed last Friday with an existing institutional holder of its corporate debt to exchange $322 million worth of Series D bonds due to be repaid in June 2009 for 28.3 million newly issued shares of GM common stock. This exchange will save us money on debt repayment and interest expense and reduces the amount of debt currently on our balance sheet, a change likely to be greeted favorably by credit ratings agencies.
Secondly, GM has tapped the remainder of its $3.5 billion in its secured revolving credit facility. This facility has been in place since 2006 and allows GM to borrow funds at an attractive rate. Given the events in the banking industry in recent weeks, we felt it was most prudent to draw the funds now and have the cash on hand as the need for it arises. A portion of the funds will go toward approximately $750 million of retiring debt and, pending court approval, payments to Delphi in excess of $1.2 billion to aid in its reorganization efforts.
I also wanted to reassure you that the internal liquidity plans announced on July 15 are on track, and these latest actions are consistent with our intention to safeguard GM’s access to cash. We will continue to look to the capital markets and other sources of liquidity as opportunities become available. The economic outlook remains uncertain, but we are pursuing every avenue to guarantee GM’s ability to fund ongoing operations and to emerge from the recent downturn a stronger and more competitive company.
We appreciate your partnership in this effort and will continue to communicate with you about our activities as circumstances warrant.
Regards,
Mark LaNeve
Vice President
Vehicle Sales, Service and Marketing
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Doesn't really fill one full of confidence when a company with the size, history, and (former) prestige of a General Motors has to discuss finances in such a way as to assure their dealer body that they are still a going concern. The question is....going where?
With letters like this I know that dealers are no longer shaking in their boots. It's like "we are from the manufacturer and we are here to help." All I have to say to their propaganda is ___, sorry I do not care for profanity. I can't believe any dealer would care to write a letter on GM's behalf.