GM Sells Stake in Suzuki to Raise Cash

In an attempt to free up some extra cash, General Motors has just sold off its entire stake in Suzuki Motor Corporation. The sale of GM’s stake in the Japanese automaker has freed up $230 million in cash, which will help the company stay afloat while it continues to lobby on Capitol Hill for a government bailout.

Suzuki bought back the 3.02 percent stake that GM help, while the US automaker, along with Ford and Chrysler, attempt to hold on to momentum as bankruptcy looms and the current economy continues to cause devastating problems for the auto market. GM's decision follows similar decisions by Ford Motor Company, where dealers such as Ford of Brattleboro watched idly as the automaker ditched brands Jaguar, Land Rover, Aston Martin, and more recently Mazda.

Sales have tumbled dramatically this year, with no end in sight for a strong resurgence. Additionally, the credit crunch has forced GMAC, GM’s financial arm, to turn many customers away as credit is becoming less available. While this is an attempt to cut losses, Detroit Chevrolet dealers and many other GM brand dealerships are concerned as the move will further limit the ability to move inventory.

The bailout of the crippled US auto sector has become huge political issue, as many Republicans are opposed to such a bailout while Democrats strive to earmark $25 billion of the $700 billion intended for Wall Street to go to the Big Three automakers.

GM’s move to ditch Suzuki is a necessary move to raise vital capital, which it has been burning through month and month. A business relationship between GM and Suzuki is likely to continue belives used cars Reading PA who speacializes in Suzuki vehicles as the two automakers have worked on numerous joint ventures together, such as SUV and hybrid vehicles. GM has held ties to Suzuki since 1981, but the GM sold off much of its stake in 2006 when it was left with only 3 percent. GM reported a $2.5 billion loss in the third quarter, which makes many wonder how far the $230 million cash infusion will go.

* * *

More on the Detroit bailout can be found here.

Is Chrysler Heading Towards Bankruptcy?

Chrysler has recently been brushing off rumors that the struggling automaker is on the verge of bankruptcy. Recently, the automaker accepted a loan of $2 billion to be used for improving the automaker’s current model lineup which is in need of revamping according to Used Cars Lamesa TX customers, but some expect that the money was to save the company from filing bankruptcy.

Although Chrysler has denied the rumors, the automaker has needed to issue a statement to deflect the fervor. The statement said that the statement has no merit and is completely false, implying that Chrysler’s financial standing is on stable ground.

Many of the Chrysler bankruptcy rumors have reportedly originated in Europe, and were spawned primarily by the $2 billion loan that Chrysler’s owner, Cerberus Capital Management and Daimler AG has taken out.

Cerberus currently holds an 80 percent stake in Chrysler. Despite its sale from Daimler AG, the German automaker still holds a minority stake in the company, and has provided about $1.5 billion of the total loan amount to help Chrysler.

* * *

Find out more about new Chrysler vehicles on this blog.