Dear GM Dealers:
Last week, I sent you a note asking you for your support for the Advanced Technology Vehicles Manufacturing Incentive Program legislation. I wanted to thank you for the response you have shown to date and ask you to continue that effort. I also wanted to let you know about additional developments regarding GM’s liquidity position.
We’ve seen unprecedented upheaval in the global capital markets and GM is responding to ensure its ongoing access to capital to fund operations and the North America turnaround.
First, GM agreed last Friday with an existing institutional holder of its corporate debt to exchange $322 million worth of Series D bonds due to be repaid in June 2009 for 28.3 million newly issued shares of GM common stock. This exchange will save us money on debt repayment and interest expense and reduces the amount of debt currently on our balance sheet, a change likely to be greeted favorably by credit ratings agencies.
Secondly, GM has tapped the remainder of its $3.5 billion in its secured revolving credit facility. This facility has been in place since 2006 and allows GM to borrow funds at an attractive rate. Given the events in the banking industry in recent weeks, we felt it was most prudent to draw the funds now and have the cash on hand as the need for it arises. A portion of the funds will go toward approximately $750 million of retiring debt and, pending court approval, payments to Delphi in excess of $1.2 billion to aid in its reorganization efforts.
I also wanted to reassure you that the internal liquidity plans announced on July 15 are on track, and these latest actions are consistent with our intention to safeguard GM’s access to cash. We will continue to look to the capital markets and other sources of liquidity as opportunities become available. The economic outlook remains uncertain, but we are pursuing every avenue to guarantee GM’s ability to fund ongoing operations and to emerge from the recent downturn a stronger and more competitive company.
We appreciate your partnership in this effort and will continue to communicate with you about our activities as circumstances warrant.
Regards,
Mark LaNeve
Vice President
Vehicle Sales, Service and Marketing
“We will continue to look to the capital markets and other sources of liquidity as opportunities become available.”
I guess that is what you do when your expenses exceed your income with no end in sight. Borrowing money is not the same thing as earning money, an eternal fact that some people are just now learning.
I loved the part where he says, “We are going to put this money towards hiring the best engineers and giving them the latittude necessary to bring great new products to market quickly without the constraints of a cumbersome management structure.”
Wow, lots of crazy management-speak in there. And I love how he talks about insane amounts of debt like it’s couch change. My parents always taught me not to buy stuff I can’t afford. Maybe they should do some consulting work for GM. Reminds me of this video: http://www.videosift.com/video/SNL-Dont-Buy-Stuff-You-Cant-Afford
1996MEdition, I don’t remember seeing that part in there. Maybe you’re dreaming of GM existing in an alternate universe or something where stupid actions result in fixes that will actually make sense and help the company.
Um, don’t worry be happy? I’m not sure thats the message LaNeve is sending with this letter.
“The economic outlook remains uncertain, but we are pursuing every avenue to guarantee GM’s ability to fund ongoing operations and to emerge from the recent downturn a stronger and more competitive company.”
That is pretty gloomy for management speak. I think the layman’s terms translation for that is, “Holy Effing SH!T we’re going down fast. Set your dealership on fire right now and hope the insurance companies still have enough in the bank to pay you something.”
I hope GM’s hunk of the $25B gets there in time to keep them going so we can look forward to sequels of LaNeve’s insightful comments; as well those of his fellow culprits. Maybe somebody can do a study of how people with such creativity in bullshit can be utter bereft of business or management ability. Might be part of that left-brain right-brain thing, or not.
I’ve read this note twice now and I don’t see the point. Anyone with any sense can see it says sweet f.a.
Either you’re 100% right Guyincognito, or the brass at GM really believe that their bulls&*t can baffle brains….. well maybe it does, after all, someone let them draw down that $3.5b and another creditor gave up the debt for GM shares. Hey, can I meet these people – I can sell them shares in my unprofitable enterprise for hard cash.
Mark La Naive is the Matt Millen of the car business. this guy has absolutely zero clue of how to sell cars and is totally incompetent. his continuation of distress merchandising is incomprehensible. his lack of marketing savvy is inexcusable and the loss of market share is completely his fault. he has no business being anywhere near the decion making process at GM and is a significant contributor to the demise of General Motors. after feeling hope over the appointment of Fritz, I weep over seeing his allowing LaNaive to continue unabated in his total inability.
Doesn’t really fill one full of confidence when a company with the size, history, and (former) prestige of a General Motors has to discuss finances in such a way as to assure their dealer body that they are still a going concern. The question is….going where?
With letters like this I know that dealers are no longer shaking in their boots. It’s like “we are from the manufacturer and we are here to help.” All I have to say to their propaganda is ___, sorry I do not care for profanity. I can’t believe any dealer would care to write a letter on GM’s behalf.