General Motors (NYSE:GM)said today that it intends to drawdown approximately $16.0 billion from its revolving credit facilities. GM is also suspending its 2020 guidance due to uncertainty around the business impact of the COVID-19 pandemic.
This increases GM’s cash position and preserves financial flexibility in light of current uncertainty in global markets resulting from the COVID-19 pandemic. The funds will supplement the company’s cash position of approximately $15 billion to $16 billion expected at the end of March.
“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,” said Mary Barra, GM chairman and CEO. “Over the past several years, we have made necessary, strategic decisions and structural changes that have transformed the company and strengthened the business, better positioning us for downturns.”
In addition, GM Financial (GMF) has strong liquidity and capitalization. GMF had $24 billion of liquidity at the end of 2019 and expects to end the first quarter with similar levels of liquidity. Its liquidity level is targeted to support at least six months of cash needs, including new originations, without access to capital markets. GMF is managing below its target leverage ratios.
“GM Financial has prepared for times like this by maintaining a strong financial position and ready access to cash. We are confident that we will be able to navigate the challenges created by this environment without capital from GM,” said Dan Berce, GM Financial president and CEO.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
General Motors Draws Down Credit Lines in COVID-19 Fight
General Motors (NYSE:GM)said today that it intends to drawdown approximately $16.0 billion from its revolving credit facilities. GM is also suspending its 2020 guidance due to uncertainty around the business impact of the COVID-19 pandemic.
This increases GM’s cash position and preserves financial flexibility in light of current uncertainty in global markets resulting from the COVID-19 pandemic. The funds will supplement the company’s cash position of approximately $15 billion to $16 billion expected at the end of March.
“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,” said Mary Barra, GM chairman and CEO. “Over the past several years, we have made necessary, strategic decisions and structural changes that have transformed the company and strengthened the business, better positioning us for downturns.”
In addition, GM Financial (GMF) has strong liquidity and capitalization. GMF had $24 billion of liquidity at the end of 2019 and expects to end the first quarter with similar levels of liquidity. Its liquidity level is targeted to support at least six months of cash needs, including new originations, without access to capital markets. GMF is managing below its target leverage ratios.
“GM Financial has prepared for times like this by maintaining a strong financial position and ready access to cash. We are confident that we will be able to navigate the challenges created by this environment without capital from GM,” said Dan Berce, GM Financial president and CEO.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.