GM Daewoo voices cash flow fears: Report
The troubled South Korean unit of US auto giant General Motors faces a “critical” phase in the second quarter of this year due to liquidity concerns, its president was quoted as saying on Thursday.Updated: Apr 02, 2009 15:15 IST
The troubled South Korean unit of US auto giant General Motors faces a “critical” phase in the second quarter of this year due to liquidity concerns, its president was quoted as saying on Thursday.GM Daewoo Auto and Technology President Michael Grimaldi said on the sidelines of the 2009 Seoul Motor Show that the company’s cash position for the April-June period was worrisome.“We are monitoring our cash position very closely,” Yonhap news agency quoted him as saying, adding it had become “critical.”
The country’s third-largest carmaker, acquired by GM in 2002, has called for one trillion won ($750 million) in emergency loans from creditors to ease its liquidity shortage.Creditors have yet to endorse the request. The government has said banks should lead the process of salvaging ailing auto firms, maintaining that direct aid breaches global trade rules.GM is in dire financial straits and is only surviving on a government bailout, as auto sales have plummeted worldwide. The US government has pledged to support its restructuring.
Grimaldi said the company would go ahead with an investment of 2.5 trillion won by the end of next year to build new facilities despite its liquidity shortage, according to a company spokesman.He did not elaborate on the investment plan.Grimaldi said GM would begin selling the Chevrolet Volt plug-in hybrid car in South Korea in 2011 to gauge consumer demand.
“The Volt is a game-changer,” he said. “This represents the future direction of the automotive industry and GM Daewoo.” The Volt, GM’s first all-electric vehicle, is designed to run 40 miles on a single battery charge. Beyond that range, it uses a gasoline engine that drives a generator to produce electrical power.
First Published: Apr 02, 2009 15:12 IST