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GM Asks for another $2.6 Billion to last until June 1

The ailing automaker continues to consume taxpayers' cash.

by on May.11, 2009

GM Renaissance Center

Rumors are circulating that GM will vacate its corporate headquarters in Detroit to cut costs.

General Motors Corporation has requested another $2.6 billion in cash from the U.S. Treasury so that it can survive until the June 1st deadline for the approval of its revised “Viability Plan.”

The plan, as it now stands, forecasts the need for a total of $27 billion in U.S. taxpayer-supplied funds. Back in February GM requested $22.5 billion in taxpayer assistance for its restructuring.

The revised plan also assumes that GM will receive $5.6 billion from foreign governments, and another $5.7 billion from the U.S. Department of Energy to develop fuel efficient vehicles. None of this is certain, of course.

GM attributed its need for more money to a higher negative cash flow that resulted from lower than forecast vehicle sales. Through April, GM sales have plummeted 45% in the U.S.

On April 22nd, GM entered into a second amendment to the existing Treasury Loan Agreement, which increased to $15.4 billion the maximum amount available under the agreement. GM borrowed the remaining $2.0 billion available under that agreement on April 24th, 2009. GM has now apparently spent that cash.    (more…)