GM is in desperate need of cash at the moment and while the sale of Hummer will help if a buyer can be found, the struggling GM won't be able to stop there. GM has now revealed that its remaining 16,413,000 shares in Japanese manufacturer Suzuki will be sold off in direct response to its mounting financial woes. The realisation of GM's three percent stock holding in Suzuki will put around USD$230 million in GM coffers; not enough to save the patient, but enough to buy a little (very little) time.
Chairman and CEO Rick Wagoner said that GM is keen to keep relations intact and continue current and future joint efforts:
"We highly value our strategic relationship with Suzuki. Despite the sale of our remaining Suzuki shares, this action will have no impact on our existing bilateral business relationships. We look forward to continue building on our success to date with our long-term partner," Mr Wagoner said.
At present the two are working on advanced technologies such as hybrids and fuel cells, joint operation of their CAMI vehicle manufacturing venture in Canada, collaboration on the development of powertrains, the cross-supply of OEM vehicles, joint global purchasing activities, and collaboration on entries in new emerging markets.
GM and Suzuki have also agreed that they would discuss the repurchase of shares in the future if GM expressed desire to do so. GM has held a stake in Suzuki since 1981 when it purchased around 5.3 percent of the Japanese manufacturer. This figure was slowly reduced in subsequent years to around 3.5 percent, climbing again to 10 percent in 1998. In 2001, GM's stake had risen to over 20 percent of the traded shares, selling off 17.4 percent in 2006 and leaving the remaining three percent now being sold.
GM's fire-sale will continue until the US government steps in or the current financial crisis eases, both of which will seem an eternity away for the financially-strained manufacturer. There's still more belt-tightening and asset sales to come. Hopefully we'll see GM come out on the other side.