GM, which has warned that it could run out of cash in the first half of 2009 absent a dramatic turnaround in the economy or a government bailout, told dealers in an e-mail that payments originally scheduled for Nov. 28 and Dec. 4 will be made on Dec. 11 and Dec. 18. Company sales chief Mark LaNeve, according to Bloomberg, explained that "in this cash crunch, we have examined every aspect of our business in an effort to improve cash flow."
The automaker, which bled through $6.9 billion in the third quarter, is seeking at least $25 billion in government-backed bridge financing while it searches for ways to raise new cash. The delay in incentive payments could help GM advance its argument that a bankruptcy would create a wide ripple effect, impacting not just workers, shareholders and creditors but crippling partners including dealers and part suppliers as well.
Meanwhile GM continues to seek out new sources of cash on its own. Earlier Monday it said it would sell its remaining 3% stake in Japan's Suzuki Motor Corp. in a deal that would generate $230 million. A number of other assets, including its Hummer nameplate, its ACDelco aftermarket part business, its medium-duty truck line and a manufacturing facility in France, remain on the block. - Lou Whiteman
See Bloomberg story
See TheDeal.com story on GM's Suzuki stake divestiture
See Dealwatch: Autos
General Motors Corp. has apparently learned a lesson or two from all of its customers who are struggling to make ends meet and waiting until the very last moment to mail their car payments in: The struggling automaker informed dealers Monday it would delay incentive payments by two weeks as part of a plan to boost its short-term liquidity.
