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]
Conundrum on Apr 27, 2020
Yes, GM just informed the plebs buying their trucks that Mary Barra's compensation has been cut back to $21.6 million from $21.9. Gotta share the pain. And the daredevil GM exec earns every penny navigating the behemoth through the Covid-19 shoals to a rocky shore.
Redgolf on Apr 28, 2020
How about them Ford execs eh? - Ford counts its cash amid pandemic after $70M exec pay exceeds company's profit in 2019 https://www.freep.com/story/money/cars/ford/2020/04/27/ford-executives-salary-covid-19-strangles-economy/3027184001/
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