GM Pads Wallet to Weather Coronavirus Storm

Steph Willems
by Steph Willems

Following in the footsteps of rival Ford, General Motors is drawing on credit to bolster its cash reserves. The company, which announced a temporary shutdown of its U.S. assembly plants last week, is in the same basket as pretty much any other automaker operating in the country.

As well, GM — again, like Ford — sees no value in its now-outdated guidance issued for 2020. That bit of predictive analysis, like a lot of things, fell victim to the sudden and disruptive appearance of the coronavirus.

As Pundit Twitter argues over whether a certain demographic should be quickly and mercilessly rolled into the sea for the greater economic good of the country, GM beancounters are more concerned with weathering this storm, however long it may last.

The company plans to daw on its revolving credit lines for an extra $16 billion of financial cushion, padding the existing $15-16 billion in cash it expects to have on hand at the end of the month.

“We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders,” company CEO Mary Barra said in a statement.

With the benefit of hindsight, it seems the industry’s feverish rush to streamline businesses in advance of a hazy, future economic shock wasn’t a pointless exercise in paranoia.

On March 18th, GM announced it would wind down production at all U.S. facilities until at least March 30th, with the situation evaluated on a weekly basis after that point. The company’s hand, like that of Ford and Fiat Chrysler, was guided by the United Auto Workers, which pressed for a combined Detroit Three shutdown.

[Image: General Motors]

Steph Willems
Steph Willems

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  • Lorenzo Lorenzo on Mar 27, 2020

    I'm amazed nobody mentioned the Vega or the GM 1980s X-platform. Both were heavily advertised "breakthrough" designs that went to market way too soon, before the bugs were worked out. The X-platform was actually improved by the time the plug was pulled, but the Vega rusted away before all the bugs were worked out. If GM hd put out the 1985 model in 1980, the X-platform would have been a huge success, instead of sales dropping like a stone in '81 when word got out that it was half-baked.

  • Lorenzo Lorenzo on Mar 27, 2020

    I'm amazed nobody mentioned the Vega or the GM 1980s X-platform. Both were heavily advertised "breakthrough" designs that went to market way too soon, before the bugs were worked out. The X-platform was actually improved by the time the plug was pulled, but the Vega rusted away before all the bugs were worked out. If GM had put out the 1985 model in 1980, the X-platform would have been a huge success, instead of sales dropping like a stone in '81 when word got out that it was half-baked.

  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
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