GM cancels $4.1 billion line of credit

[91 s-10baja]

Back in June 2007, GM was staring a lot of financial variables in the face. To help alleviate a potential cash crunch, the General took out a $4.1 billion line of credit with a syndicate of banks to ensure that bills would get paid in the event of an emergency. The UAW negotiations have come and gone, and the Cadillac CTS and Chevy Malibu have launched without the General needing to dip into the credit line, so GM terminated the agreement. The automaker informed the U.S. Securities and Exchange Commission that it had "sufficient liquidity and financial flexibility" in the first half of 2008 to cover its bills without borrowing additional funds.
We won't pretend to know whether GM canceled the credit line because it's starting to see progress in the US, or if the UAW negotiations went better than it thought, or if the Detroit automaker kept the plastic in its wallet this holiday season. We do know, however, that not having to borrow $4.1 billion is probably a good thing.
http://www.autoblog.com/2008/01/06/g...ine-of-credit/

[marinerbc]

Not having to borrow is always better than borrowing, if you're a country, a corporation, or an individual.

I will be interested to see how the naysayers turn this into a negative for GM, however.

[Flyingbunnys]

It could have use the money to speed up the turn around, but not being in dept is probably better.

[ctaylorzl1]

^^^Not being in debt is always better!!!

[E. Haskell]

They could've divided that money up among the members of GMI.

[Commodore]

Awesome. Further testament to the fact that GM is back; financially, creatively, and every other way

[jbernie]

Originally Posted by Flyingbunnys

It could have use the money to speed up the turn around, but not being in dept is probably better.

Not really, you can only make so many changes in a certain amount of time. Going too fast can send you backwards.

I think the big thing here is they have made all the high risks plays (GMT900 suvs & trucks, malibu, cts, etc) and have been pretty successful with almost every card. Most of the changes remaining arent as costly or more likely the income they have coming in from the mainstream vehicles is sufficent to not call on the line of credit which was probably taken at an unfavourable rate anyways.

[mgescuro]

Originally Posted by ctaylorzl1

^^^Not being in debt is always better!!!

There are very very few companies that have little/no debt... and there's only 1 car company in that situation.

1 guess as to which one it is....

[LeSabre]

^I'm not even going to say that curse word....name.
Nope. Won't do/say it!

[Koasterking]

Originally Posted by E. Haskell

They could've divided that money up among the members of GMI.

I second that. I can use the money to pay off my own debt!


Good to see GM have security in itself again....and it's been awhile.

[Cortazzo]

Good, maybe the price of my GM bonds will go up!

[steverino]

Hopefully might improve their credit rating in a few months

[377Z]

Originally Posted by mgescuro

There are very very few companies that have little/no debt... and there's only 1 car company in that situation.

1 guess as to which one it is....

Wow, nobody got it yet.

Hint: It's the one that went private.

[drew770]

Originally Posted by mgescuro

There are very very few companies that have little/no debt... and there's only 1 car company in that situation.

1 guess as to which one it is....

It's amazing just how few companies have no debt. Microsoft, Walgreens, Cisco Systems, Apple & Wrigley have no corporate debt.

[Chaz_23]

Watch the stock plummet because, well, this is America, and the more money you have to waste on marketing, executive bonuses, media parties, etc. the better your situation must be, even if it's borrowed money, so what, it's all about borrowing as much as you can and paying the banks as much as you can.