General Motors Suspends Dividend Again
Posted on 04/27/2020
American car giant General Motors (GM) is suspending its quarterly dividend and stock buybacks to preserve its cash during the Wuhan coronavirus pandemic. GM’s annual dividend is US$ 1.52 a share. Earlier, Ford Motor Company suspended its dividend. GM suspended its dividend 12 years ago during the global financial crisis.
GM’s stock is down 40% since the start of 2020.
“We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” GM Chief Financial Officer Dhivya Suryadevara said Monday in a statement. “Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle.”
Since the middle of March 2020, the United States plants of GM have closed due to the pandemic. GM is in talks with the United Auto Workers union to attempt to reopen the auto plants. Ford Motor Company and Fiat Chrysler are also talking to the massive employee union. Japanese car companies in the U.S. have also closed operations.
GM revealed it has extended a US$ 3.6 billion, three-year revolving credit facility to April 2022 to help enhance its liquidity profile. GM had recently renewed a US$ 1.95 billion 364-day revolving facility for use by its GM Capital arm.