Tuesday, January 11, 2011

GM finances take turn for the better

GM vice chairman and chief financial officer Chris Liddell told reporters Tuesday one of GM's major financial objectives is to restore the company's investment grade credit rating. "If you look at GM historically it was an investment grade company. "It only became highly leveraged," Tin the last 15 or 20 years, Liddell observed. The 2009 bankruptcy, GM has debt was reduced substantially and GM has continued to pay remaining debt, which included making contributions to the pension fund. "I don't think we're that far from investment grade. But the rating agencies have different idea.They will want to see a consistent" performance from GM.
 Liddell also said looking into the future, GM will try to hold capital spending at a steady from year to year. Stronger finances will enable GM to hold capital spending level during a downturn. In the past , capital spending has been been dramtically reduced and projects cancelled during recession. "But that's enormously expensive," he siad. It's better in the long run for GM to hold capital spending steady during both good time and bad, he said.


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