GM's Big Cut (GM)
Credit agencies cut some of GM's debt recently as the automaker provided additional collateral for some of its loans. The company is renewing a $5.6 billion debt facility. Restatement of its results earlier this year motivated the lenders to ask for more security.
Although the a settlement among GM, Delphi, and the UAW appears to be done, which would take a fair amount of pressure off GM by making a crippling strike less likely, the fear that sales are still falling has cast a shadow over the company's recovery.
GM sales in Europe increased over 10% in May, and its operations in China has shown promise.
In North America, GM's largest market, Japanese cars still dominate quality surveys like JD Power. And the car makers North American sales dropped an extraordinary 16% in May, and share in NA has dropped three points to 22.5%. For the period, car sales dropped a more alarming 19%. Truck sales were down less, only 13%.
Credit agencies and lenders have lost patience with GM. The fact that more collateral is needed for debt is a sign that financial experts do not think the North American turnaround can stay ahead of falling sales.
And, that is bad news for GM and its shareholders.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
Although the a settlement among GM, Delphi, and the UAW appears to be done, which would take a fair amount of pressure off GM by making a crippling strike less likely, the fear that sales are still falling has cast a shadow over the company's recovery.
GM sales in Europe increased over 10% in May, and its operations in China has shown promise.
In North America, GM's largest market, Japanese cars still dominate quality surveys like JD Power. And the car makers North American sales dropped an extraordinary 16% in May, and share in NA has dropped three points to 22.5%. For the period, car sales dropped a more alarming 19%. Truck sales were down less, only 13%.
Credit agencies and lenders have lost patience with GM. The fact that more collateral is needed for debt is a sign that financial experts do not think the North American turnaround can stay ahead of falling sales.
And, that is bad news for GM and its shareholders.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in companies he writes about.
posted by douglas mcintyre at 8:26 AM
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