GM Pads Wallet to Weather Coronavirus Storm
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As well, GM — again, like Ford — sees no value in its now-outdated guidance issued for 2020.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]
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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.
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.