GM creates backup plan in case federal aid is not received

Article by Christian A., on August 27, 2010

Everybody knows the existing financial dilemmas of GM, with the Big 3 acknowledging lately that they will be out of funds early in 2009 if the federal government will not step in and help them.

In spite of the gravity of the situation, and the polls showing that majority of the people are in favor of a government bailout of the automotive industry, a strong and gloomy possibility lingers of a rejection of these appeal for loans, in which case GM must put in motion a secondary plan to avoid bankruptcy prior to President-elect Obama's sitting as President of the US. 

Presently, GM is putting into place numerous means to preserve its cash flows at a satisfactory level, but with about $12.5 billion to be demanded any time soon to keep the firm in operation these measures may have to be accelerated to steer clear of bankruptcy.

GM has already announced that it won't be vending any more brand assets except for Hummer, but this doesn't signify that it can't sell other physical assets such as unproductive plants and shares in other companies.

Just lately, GM sold its left over share in Japan's Suzuki of 3%, earning about $230 million for the piece of shares on the open stock market in Tokyo.

General Motors will also be putting off the introduction of new models just to maintain liquidity. It was reported earlier on that GM is compelled to postpone the Cadillac CTS Coupe and the Buick LaCrosse because of high costs.

The automaker will also for the time being defer corresponding payments into its employees' 401(k) accounts as it wrestles to increase liquid cash. The postponement has become effective last November 1, and will impact GM's whole North American workforce.

Moreover, GM is also reported to be assessing the number of paid workers it has, with an eye of laying off up to 5,000 employees in order to greatly reduces its costs. GM is anticipated to make an public announcement after Thanksgiving concerning the odds of its success.

Topics: gm, plan

If you liked the article, share on:

Comments

Recommended

Autocar has got some juicy rumours for us regarding a new McLaren hypercar. The British publication has inside sources claiming that a new model will be added to the Ultimate...
by - July 27, 2017
Ferrari has recently launched the New Power15 extended warranty program. The company developed this program in response to the notion that supercars are very expensive to maintain. Truth be told,...
by - July 27, 2017
The UK it seems is about to take the same road as its neighbouring country France by banning sales of petrol and diesel vehicles beginning 2040. As reported by The...
by - July 27, 2017
What has BMW been up to lately? The company recently announced that they are currently focusing on electrification, and so far, their new architecture will enable “electrification of every model...
by - July 26, 2017
A couple of days ago, Ford came out with their pursuit-rated F-150 Police Responder, and we were quite impressed with what it has to offer. And we are pretty sure...
by - July 26, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries