GM Fire Sale Continues: RenCen for Sale
With a conflagration raging through GM’s cash hoard, with enough debt and ongoing obligations to bury Bolivia, with its credit rating in the proverbial toilet (CCC), with the North America market fire hosing the company’s books with red ink, GM’s access to operating finance is, shall we say, “limited.” To feed the flames, GM’s already sold just about everything that’s not nailed down: subdivisions, 51 percent of captive financier GMAC, land, factories, shares in foreign automakers, etc. It’s not enough. Three months ago, GM CEO Rick Wagoner announced he’d raise $15b in cash through additional asset sales. The Detroit News reports that the company’s Renaissance Center headquarters is now on the block. “General Motors Corp. wants to borrow about $500 million from one or both of Detroit’s pension funds to refinance the Renaissance Center, the automaker’s iconic world headquarters, in a move that could pump cash into the financially strapped company’s coffers. GM officials are scheduled to make a preliminary investment pitch Thursday to the city’s Police & Fire Retirement System and are trying to schedule a meeting with the pension fund representing general city employees.” If not that, RenCen’s for sale. Does it strike you as odd that GM’s hitting-up the unions instead of banks or real estate investors? Does this have anything to do with the United Auto Workers’ forthcoming VEBA payment? Anyway, at $500m, GM’s looking at a $201m loss on the deal. In theory. “We’re not going to do it because we don’t have that kind of money,” said George Orzech, police and fire pension board member. “There’s no interest that I know of, but stranger things have happened.”
Domestic Hearse on Oct 08, 2008
Irony of ironies...TOYOTA buys the RenCen and changes the name to the YenCen. "Ah, Mistah Wagnahsan...we have redecorated your office and moved it to the, ah, basement with the janitah. You will report to him." Seriously, if you're a fireman or cop in Detroit, do you want anyone to gamble your future with GM-owned Detroit real estate? And $500m? Heck, that's just 15 days of cash burn any more.
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