GM To Sell Suzuki Stake, Pay A Week Worth Of Bills

gm to sell suzuki stake pay a week worth of bills

The Associated Press is reporting that General Motors now plans to sell back its 3.02 percent in Suzuki for $230m. Buckingham Research Group’s Joseph C Amaturo gets credit for pointing out that “while the sale is indicative of GM’s near-term liquidity challenges, the proceeds are not very meaningful.” In other words, it takes a lot of $230 millions to fill a $5b hole. “GM is expected to burn $4 billion to $5 billion in (the fourth-quarter) or roughly $1.5 billion per month. Hence, the cash proceeds from the sale of its equity stake will not even cover one week of expected cash burn,” Amaturo said. Not that it’s bothering Suzuki. “We fully understand the necessity for GM to raise cash,” Suzuki chairman and chief executive Osamu Suzuki noted dryly, adding that GM and Suzuki would continue to pursue a business partnership. Joint development of hybrid vehicles and a joint venture building sports utility vehicles in Canada are said to be on the collaboration agenda. The two automakers are also joint stakeholders in GM’s currently-stalled South Korean operations, GM-DAT. GM has owned portions of Suzuki since 1981, only selling off 17 percent in 2006. The saddest part of this story? It decreases the likelihood that GM will help bring Suzuki’s current (well-received) Swift to the states. Not that they needed a competitive small car or anything.

Comments
Join the conversation
4 of 17 comments
  • Lee Lee on Nov 17, 2008

    Can anyone tell me why they shouldn't sell SAAB as well?

  • Frenchy Frenchy on Nov 17, 2008

    Does anyone want Saab anymore? Does Saab have it's own platforms and engines or are they the same platform as the aura/g6/malibu? I don't think buying Saab would get the buyer much, other then a damaged brand.

  • Happy_Endings Happy_Endings on Nov 17, 2008
    Can anyone tell me why they shouldn’t sell SAAB as well? I don't think the problem is that GM is reluctant to sell, but rather someone else willing to buy (or at least buy at GM's asking price).

  • Fallout11 Fallout11 on Nov 18, 2008

    Saab, as it is, isn't worth anything. It is sort of GM's version of Jaguar, a company that you have to pay someone to take off your hands (liabilities exceed worth).

Next