- General Motors announced recently that it is going to draw about $16 billion from credit lines in order to increase its liquidity during the COVID-19 pandemic
General Motors announced recently that it is going to draw about $16 billion from credit lines in order to increase its liquidity during the COVID-19 pandemic. And General Motors also suspended its 2020 outlook.
Plus General Motors is also deciding whether to suspend its quarterly dividend. As of the end of 2019, GM had $34.6 billion in liquidity including $17.3 billion in cash.
“We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity,” said General Motors Chairman and Chief Executive Officer Mary Barra in a statement.
GM rival Ford also canceled its 2020 forecast and drew $15.4 billion from two credit facilities. Ford has over $37 billion in cash.
Financial analysts suggest that corporate liquidity is essential and U.S. automakers have large balance sheets in order to get through the impact of the pandemic.
GM’s financial services unit GM Financial is expecting to end the first quarter with around $24 billion in liquidity. GM also suspended its 2020 outlook. And the company’s factories in North America has been shutdown until March 30.
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