Blog: Does GM have enough cash?
Dave Leggett | 9 January 2009
I have just been talking to Rob Golding on the phone. After we'd discussed the potential merits of dining on roadkill (see previous blog posting) we got onto the subject of GM's cash position. He's looking into the question of whether or not GM does have enough cash after the latest federal loan cash infusion - the recent suggestion that GM now has enough has come from the UAW's Gettelfinger.
Expect the whole subject of Detroit's crisis to get a good airing in the media early next week. Press day at the Detroit Show is on Sunday and a GM press conference is scheduled for 10:00am.
A key factor is going to be market assumptions for 2009. And that's an issue everywhere, as Nissan's announcement about Sunderland yesterday illustrates. Bear in mind that the Nissan plant is a model plant, making hot products and said to be Europe's most productive in terms of output per employee. It exports a big chunk of its output to continental Europe and weak sterling versus the euro will be helping it. Nevertheless, if the market is way down and forecast to stay that way, there's no escape. After the extended shutdowns, down days and holidays that are the initial response to slower demand and inventory accumulation, the time comes to bite the bullet, however reluctantly, and take fixed cost out.
Expect to see similar announcements from others in the coming weeks..
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