- Jan 6, 2008
GM cancels $4.1 billion line of credit
Back in June 2007, GM was staring a lot of financial variables in the face. To help alleviate a potential cash crunch, the General took out a $4.1 billion line of credit with a syndicate of banks to ensure that bills would get paid in the event of an emergency. The UAW negotiations have come and gone, and the Cadillac CTS and Chevy Malibu have launched without the General needing to dip into the credit line, so GM terminated the agreement. The automaker informed the U.S. Securities and Exchange Commission that it had "sufficient liquidity and financial flexibility" in the first half of 2008 to cover its bills without borrowing additional funds.
We won't pretend to know whether GM canceled the credit line because it's starting to see progress in the US, or if the UAW negotiations went better than it thought, or if the Detroit automaker kept the plastic in its wallet this holiday season. We do know, however, that not having to borrow $4.1 billion is probably a good thing.
[Source: Auto News (subs. req'd)]