Coronavirus Marches On; GM Tightens the Purse Strings

Steph Willems
by Steph Willems

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]

Steph Willems
Steph Willems

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  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
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