GM: $30 billion minus $2 billion is still $30 billion

Posted by: David Welch on March 12, 2009

Here’s a little public relations maneuver for you. General Motors said today that the company won’t need $2 billion in credit this month from the Treasury Department. GM says that it has cut corners, wrung out costs and otherwise thrifted its way to saving $2 billion. The company retrofitted an old building to house a new engine plant to save bucks. It has also cut back marketing during the NCAA Final Four to pinch a few more pennies.

But GM still wants access to as much as $30 billion in government loans. That is the same amount the company said it would need when management submitted its restructuring plan to the Treasury Department on Feb. 17. In other words, $30 billion minus $2 billion is still $30 billion in government loans. So while the savings may be real, GM still must borrow heavily to stay out of bankruptcy. That’s why this is a P.R. play. Give the company its due for continuing to slash costs. But the story line remains the same for now. GM is on life support.

Reader Comments

detfan

March 13, 2009 9:28 PM

Mr Welch, I suppose you have your reasons for being cynical, but it is great news that GM will not need assistance in March. If SAAR improves to 10.5 in a couple months, certainly GM will not need all the 30B, but I'd sure keep it reserved if SAAR stays at 9.3B.

Go GM

March 14, 2009 11:53 AM

Hey Dave, thanks for the insightful 2 paragraph blurb... oh and one more thing: No *@&%, Sherlock!

dave

March 15, 2009 5:35 PM

Why don't the 3 companies get together and produce new models EVERY OTHER YEAR. This alone would save billions and do we really need a new model each year? I'm sure Toyota, Honda and Nissan would follow suit.

JT

March 16, 2009 4:40 PM

Isn't that $2 Billion about how much they have conserved by paying suppliers late?

aj

March 17, 2009 2:59 PM

GM _ it take GM 5 years vs. 3 for the transplants to introduce a new vehicle, The UAW is still trying to craft a deal out of the taxpayers - Beat the most productive transplant or walk....They already hosed the stockholders

Jeff B

March 18, 2009 11:57 AM

GM is a master at deceptive spin, so this is no surprise. Just like the "30 car models they have which get 30mpg"! Pure BS. They count every different version of the bottom-feeder Cobalt as a different "model".
If GM keeps cutting these costs, they will soon be the world's most efficent producer of mediocre products! Hooray! Here's more of my tax dollars...

Brendan

March 18, 2009 5:18 PM

GM cannot shrink itself fast enough. Too many brands, too many dealers, too many workers, the list goes on.

Larry Underwood

March 18, 2009 11:51 PM

It's a sad commentary on our society, when a comedian, Jon Stewart, tries to make a guy like Jim Cramer look bad by harping on some stock market advice that didn't pan out. As Cramer explained, "Why didn't he mention that I told everybody to get out of the stock market on October 28?" Well, that wouldn't have been funny.

Larry Z

March 19, 2009 5:21 PM

"Dead man walking - This dog don't hunt" Repeat!!

Rant

March 19, 2009 8:44 PM

They should pay lower cost for salary such as Honda did, Honda pay lower labor cost so they can cut the cost.

LH

March 20, 2009 7:05 AM

It is time that David Welch changes. He always takes the negative attitude towards GM and has shown this personal bias over the years in his articles. GM has shown the initiative to say they do not need the montly cash. Their restructuring plan is excellent. Let's start looking at some of the positives. Why do we not hear more from Welch concerning the transplants that he has continued to favour in his articles. They are suffering significantly. I understand that a recent independent survey placed Buick along with Jacquar as top quality vehicle replacing the transplant Lexus. Start looking at the positives! They are there.

sandra

March 21, 2009 8:03 PM

WAY TO GO GM: Too bad there are those negative few, who just can't stand it that GM is going to be okay. I wish you all well and perhaps what you need to do is learn some manners. Drive what you want, a horse and buggy if you can. Try and focus on being a better Canadian and trying to think positive. As a stress reliever, go on websites that enjoy people like yourself. Maybe a hockey site, lots of action there for you.

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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