Coronavirus Marches On; GM Tightens the Purse Strings

coronavirus marches on gm tightens the purse strings

Burning through piles of cash as plants sit idle, sales plummet, and the bulk of its vast workforce still demands payment during the virus-borne production shutdown, General Motors is taking new measures to protect its finances.

On Monday, the automaker announced a number of steps designed to anger shareholders in the short term, but a production restart date remains as elusive as before.

First off, the company’s quarterly dividend and stock buyback is scrapped, helping keep the company’s cash where it wants it, and a three-year, $3.6 billion revolving credit agreement is now extended until April 2022.

“This complements the extension of the $2 billion 364-day revolving credit agreement to April 2021 that GM and GM Financial renewed earlier this month,” the automaker said in a release.

While stockholders will miss that dividend, GM Chief Financial Officer Dhivya Suryadevara offered up some fiscal solace, stating, “Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle.”

In late March, the automaker announced a deferred payment plan for its white collar employees and the furlough of around 6,500 U.S. workers.

GM didn’t take the opportunity on Monday to update the public on its production restart preparations; those hit the back burner last week after UAW President Rory Gamble issued a statement saying it was too dangerous to worker health to go ahead with an early-May restart. Gamble’s statement came as media reports pointed to early moves to get plants back online.

“We have not done enough testing to really understand the threat our members face,” Gamble said. “We want to make sure the scientific data is supportive and every possible health protocols and enhanced protections are in place before UAW members walk into the workplace.”

GM’s stock sank about 2 percent in early Monday trading.

[Image: General Motors]

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  • Redapple2 Guys. 80 K? Who buys these? I mean professionals- Doctors Lawyers, Engineers, Coder beta boy whatever, have the money but dont buy the cave man, bro dozer. The red necks that want them make peanuts. So>? Redneck contractors buy them? Those that can write it off thru the business (and burn company gas)
  • EBFlex What a colossal waste of money. But this installed administration has yet to spend one cent on something that is actually useful and actually leads to some progress. But apparently this is just what we need….a bunch of extremely overpriced but short ranged busses. It’s amazing that all our problems are solved that they have time to waste money on these little pet projects.
  • Hector How much for steering column?
  • John S. Beautiful car, fun series installment, Corey.
  • FreedMike Any link to the grant applications that were denied?
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