November 7, 2008Print this page
· Operating actions announced July 15 remain on track, targeted at $10 billion in cash improvements through 2009
· Asset sales of $2-4 billion in process, including Hummer, ACDelco and Strasbourg facilities
· Additional actions targeted at further improving liquidity by $5 billion by end of 2009
· 2009 capital spending reduced by $2.5 billion; key product and technology programs on track
· Additional GMNA structural cost reductions of $1.5 billion
· Further working capital improvements of $500 million
· Further salaried employment cost reductions of $500 million
· Engaging the U.S. government to aid the domestic auto industry
General Motors Corp. (NYSE: GM) today announced it is taking further actions to improve liquidity and reduce structural cost in response to deteriorating global economic conditions, tight credit market conditions and a rapid retraction of sales in the auto industry.
“Volatility in the world’s financial markets, tightening of consumer and business credit and historically-low consumer confidence has created a very challenging environment ,” said Rick Wagoner, GM chairman and chief executive officer. “Given the current lack of credit availability we must take further difficult ‘self-help’ actions .”
Over the past several years, GM has been taking major actions to restructure its business and position it for long-term growth, making dramatic reductions in structural cost, revitalizing its product portfolio with award-winning vehicles, growing aggressively in emerging markets around the world and making demonstrable strides in advanced technology leadership (link to release).
As part of its ongoing restructuring, on July 15, 2008 GM outlined a number of initiatives aimed at improving liquidity by an estimated $15 billion through 2009 (link to release). Those initiatives included internal operating actions within the company’s control that are estimated at $10 billion, asset sales estimated at $2-4 billion and capital market activities targeted at $2-3 billion.
To date, the $10 billion in internal operating actions have either been completed or are on track for full execution by the end of 2009.
GM’s assets currently being assessed for potential sale include the Hummer vehicle business and brand and its ACDelco all-makes aftermarket parts business, which has distribution channels in more than 100 countries. GM is also evaluating strategic options for its technical and manufacturing center in Strasbourg, France. GM is also analyzing other potential asset sales.
Despite the seizing up of the credit markets, GM c ompleted some capital market transactions (link to release) in September to improve the company’s liquidity by $500 million by year-end 2009. While GM has unencumbered assets of more than $20 billion that it could potentially use as collateral for a secured debt offering, the U.S. credit markets remain inaccessible, and the contagion effect on other financial markets around the world provides limited alternatives. Accordingly, t he timing of the $2-3 billion of capital market financing GM initially targeted remains uncertain.
In light of the further deterioration in the U.S. auto market and continued turmoil in the global financial markets, GM is making downward revisions to its liquidity planning assumptions. For planning purposes, GM is assuming U.S. light industry sales volumes of 11.7 million units in 2009, and 12.7 million units in 2010. GM is also revising its average oil price estimates to range between $60-80 per barrel in 2009, and $100-$120 per barrel in 2010. read more...
gmeurope
· Asset sales of $2-4 billion in process, including Hummer, ACDelco and Strasbourg facilities
· Additional actions targeted at further improving liquidity by $5 billion by end of 2009
· 2009 capital spending reduced by $2.5 billion; key product and technology programs on track
· Additional GMNA structural cost reductions of $1.5 billion
· Further working capital improvements of $500 million
· Further salaried employment cost reductions of $500 million
· Engaging the U.S. government to aid the domestic auto industry
General Motors Corp. (NYSE: GM) today announced it is taking further actions to improve liquidity and reduce structural cost in response to deteriorating global economic conditions, tight credit market conditions and a rapid retraction of sales in the auto industry.
“Volatility in the world’s financial markets, tightening of consumer and business credit and historically-low consumer confidence has created a very challenging environment ,” said Rick Wagoner, GM chairman and chief executive officer. “Given the current lack of credit availability we must take further difficult ‘self-help’ actions .”
Over the past several years, GM has been taking major actions to restructure its business and position it for long-term growth, making dramatic reductions in structural cost, revitalizing its product portfolio with award-winning vehicles, growing aggressively in emerging markets around the world and making demonstrable strides in advanced technology leadership (link to release).
As part of its ongoing restructuring, on July 15, 2008 GM outlined a number of initiatives aimed at improving liquidity by an estimated $15 billion through 2009 (link to release). Those initiatives included internal operating actions within the company’s control that are estimated at $10 billion, asset sales estimated at $2-4 billion and capital market activities targeted at $2-3 billion.
To date, the $10 billion in internal operating actions have either been completed or are on track for full execution by the end of 2009.
GM’s assets currently being assessed for potential sale include the Hummer vehicle business and brand and its ACDelco all-makes aftermarket parts business, which has distribution channels in more than 100 countries. GM is also evaluating strategic options for its technical and manufacturing center in Strasbourg, France. GM is also analyzing other potential asset sales.
Despite the seizing up of the credit markets, GM c ompleted some capital market transactions (link to release) in September to improve the company’s liquidity by $500 million by year-end 2009. While GM has unencumbered assets of more than $20 billion that it could potentially use as collateral for a secured debt offering, the U.S. credit markets remain inaccessible, and the contagion effect on other financial markets around the world provides limited alternatives. Accordingly, t he timing of the $2-3 billion of capital market financing GM initially targeted remains uncertain.
In light of the further deterioration in the U.S. auto market and continued turmoil in the global financial markets, GM is making downward revisions to its liquidity planning assumptions. For planning purposes, GM is assuming U.S. light industry sales volumes of 11.7 million units in 2009, and 12.7 million units in 2010. GM is also revising its average oil price estimates to range between $60-80 per barrel in 2009, and $100-$120 per barrel in 2010. read more...
gmeurope
