Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outlook

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Thread: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outlook

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    6.2 Liter LS9 Supercharged V8 Premium Member jzchev28's Avatar
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    Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outlook

    General Motors said Tuesday it is “aggressively pursuing austerity measures” and intends to draw down $16 billion from its revolving credit facilities.

    The company called it a “proactive measure” to preserve financial flexibility. GM expects to have $15 billion to $16 billion in cash at the end of this month.

    In the wake of the announcement, GM shares were up more than 9% in early trading. The stock, which has a market value of $26.3 billion, had fallen 50% in 2020.

    “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,” CEO Mary Barra said in a statement.

    Continued at link: https://www.cnbc.com/2020/03/24/gene...0-outlook.html

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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Sounds like they learned from the last time. Cash is king when things go south in a big way.
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by eaton53 View Post
    Sounds like they learned from the last time. Cash is king when things go south in a big way.
    Going south? So can we expect Mary to start saying y'all and ya-heah and stuff like that?
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by Neanderthal View Post
    Going south? So can we expect Mary to start saying y'all and ya-heah and stuff like that?
    As long as Mary doesn't keep touting "zero, zero, zero" while sayin y'all and yeehaw, it's all good.
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Ford/Mulally were the only ones who seemed to appreciate having cash on hand going into the last recession. Happy to see the lesson was not lost on GM (and even happier to see "zero cash" is not one of Mary's goals!).
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    Speaking of very little cash at hand, I wonder how Tesla will fare in these times......

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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by jpd80 View Post
    Speaking of very little cash at hand, I wonder how Tesla will fare in these times......
    Just like history's other pyramid schemes...

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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by Neanderthal View Post
    Going south? So can we expect Mary to start saying y'all and ya-heah and stuff like that?
    As soon as she learns English again.

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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by jpd80 View Post
    Speaking of very little cash at hand, I wonder how Tesla will fare in these times......
    Well, Tesla had $6.5B in cash at the end of Q4 last year and raised another $2B in February (although people questioned that additional capital raise at the time, it looks quite prudent now). For their size, I suspect they have a decent amount of cash on hand. We'll know more when the Q1 financials come out.
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    I for one am very happy that Mary B. is at the helm in times like these. She has shown fiscal responsibility unseen in GM for decades, she has shown the gumption to drop money losers. She knows how to keep the company alive.

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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by BlackGTP View Post
    I for one am very happy that Mary B. is at the helm in times like these. She has shown fiscal responsibility unseen in GM for decades, she has shown the gumption to drop money losers. She knows how to keep the company alive.
    +1
    And despite parroting the "zero, zero, zero" nonsense in recent years, Mary Barra wasted no time in making key strategic and operational changes impacting the financial health of General Motors. That's a refreshing change from the old GM, which often waited until a major crisis to do so.

    No dilly-dally from Mary!
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    And the salaried staff take a 20% pay cut for the rest of the year! (But Mary is taking a cut too!)

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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Quote Originally Posted by BlackGTP View Post
    I for one am very happy that Mary B. is at the helm in times like these. She has shown fiscal responsibility unseen in GM for decades, she has shown the gumption to drop money losers. She knows how to keep the company alive.
    Yup, she is smart; especially when she promoted a 39 year old, fixed-income (bonds) manager to CFO.............

    Hopefully all the smart people on the team didn't get discouraged and quit when she was appointed, she'll need some "senior leadership".


    Looking at GM's 2019 Q4 Earning Statement, it looks like they had about 23.5 Billion, but....................

    Per Automotive News GM was projecting to have about 15 Billion at the end of Q1, and burning a ton the last few weeks, this 16 Billion gets them to about 30 million.

    What is a "buffer" a company the size of GM needs to survive? 5 ~ 10 Billion?

    During the strike last fall, GM was burning through about 0.5 Billion a week.
    Last edited by Ed753; 03-26-2020 at 10:21 PM.
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    Annual Dividend cost is a little over 2 Billion (assuming they don't cut or suspend).

    Also stock buy-back plan has about 3.5 Billion remaining.

    Precarious times....................
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    Re: Breaking! General Motors will draw down $16 billion in credit, suspends 2020 outl

    The key is the is the claim by mother that all the shutting down around the globe mean she can keep GM profitable at a SAR of 12 million , that is at an annual selling rate lower by 5 million from where it was before the crisis, If she can do that, GM should become the most valuable auto company, since I do not see even cheap Toyota eking out a living at that annual rate.

    Yeah, how about Tesla.

    As we speak, Nissan/ Renault are in real trouble now.

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