GM Buys 8.6 Days By Selling Suzuki Stake
Posted by: David Kiley on November 17, 2008
GM is selling its 3% stake in Japanese automaker Suzuki, which will raise about $230 million. Gm has had an investment in Suzuki since 1981. At one point, it held about 20% of the company.
GM and Suzuki have partnered on technology and a few vehicles over the years. Who could forget the Chevy/Geo Metro or the Geo Tracker, which were both Suzuki designed and built?
Suzuki says it will continue its relationship with GM, and understands the automaker’s need to raise cash.
If GM is burning about $2 billion in cash a month, then the Suzuki sale just bought GM 8.6 days of life.
GM says it is burning cash at a rate that will leave it empty by mid 2009. But, in truth, it needs at least $8-$10 billion to operate. If it falls below that level, it will have difficulty meeting payroll, producing vehicles or paying suppliers.
Congress is meeting this week to decide whether or not to float the Big Three as much as $50 billion in bridge loans to help it get through the Recession.
