GM to Sale 51% stake in GMAC
Fast cash for world’s largest automaker
GM is heads over heals right now trying to figure out how to make their company profitable. They’re laying employees off, closing plants, cutting pension plans, and selling their cornerstone stock in GMAC for a quick $14 billion.
Rick Wagoner, GM Chairman and Chief Executive, believes this move will sustain the company for a turn around from its $10.6 billion loss in 2005. However, many investors still don’t believe this "quick fix" will actually fix anything in the long run.
GM had to have been in one of the tightest corners ever to sell their stake in GMAC. So, I’m starting to believe that things are worse than they seem.
But GM’s shares sank more than 3 percent after the announcement as analysts questioned whether the cash infusion would have a lasting impact on GM’s outlook and major credit ratings agencies indicated the deal may not lead to an investment-grade rating for the finance arm.
Nothing is looking good for GM at the moment. I surely hope this $14billion is enough to get them back up and running.
I know this is an extremely serious matter and I don’t mean to lighten it at all, but I can’t help but wonder how a company gets in such a bad position where $14 billion is not enough to ensure success?
See Also
- AutoWarranties.com
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