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As well, GM — again, like Ford — sees no value in its now-outdated guidance issued for 2020.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.

  • Grg I am not sure that this would hold up in snow country. It used to be that people in snow country would not be caught dead in a white car. Now that white cars have become popular in the north, I can't tell you how many times I have seen white cars driving in the snow without lights. Almost all cars are less visible in a snow storm, or for that matter, rain storm, without lights. White ones become nearly invisible.
  • Douglas I have a 2018 BMW 740e PHEV, and love it. It has a modest electric only range compared to newer PHEV's (about 18 miles), but that gets me to the office and back each day. It has a small gas tank to make room for the battery, so only holds about 11 gallons. I easily go 600 or more miles per tank. I love it, and being able to take long road trips without having to plug in (it just operates like a regular Hybrid if you never plug it in). It charges in 75 minutes in my garage from a Level 2 charger I bought on Amazon for $350. Had an electrician add a dryer outlet beside the breaker box. It's the best of both worlds and I would definitely want a PHEV for my next car. 104,000 miles and ZERO problems with the powertrain components (so far).
  • Panther Platform I had a 98 Lincoln Mark VIII so I have a soft spot for this. The Mark VIII styling was not appreciated by all.
  • Grant P Farrell Oh no the dealership kept the car for hours on two occasions before giving me a loaner for two months while they supposedly replaced the ECU. I hate cords so I've only connected it wirelessly. Next I'm gonna try using the usb-c in the center console and leaving the phone plugged in in there, not as convenient but it might lower my blood pressure.
  • Jeff Tiny electrical parts are ruining today's cars! What can they ...
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