Cash-strapped General Motors will sell its entire stake in Suzuki $230m the carmaker's latest move to stay afloat while awaiting a decision on government aid for the industry.
GM to sell $230m Suzuki stake
Suzuki said on Monday it would buy back the 3.02% stake from the American automotive giant, which is seeking a $25bn government
lifeline, together with Ford and Chrysler LLC, to weather the deepening economic crisis.
Hit by the worst sales slump in more than 25 years and frozen credit, GM has warned that it might not survive through year's end
without the US government's financial support.
Hardline Republican opponents of a motor industry bailout have branded the industry a "dinosaur" whose "day of reckoning" is near,
while Democrats pledged Sunday to do their best to get Detroit a slice of the $700bn originally earmarked for a Wall Street rescue.
Suzuki said GM's stake sale was necessary for the ailing American carmaker to raise capital, but the Japanese company insisted it would
continue a business partnership with GM.
"We fully understand the necessity for GM to raise cash," Suzuki chairman and chief executive Osamu Suzuki said in a statement. He said
he was in close contact with GM chief executive Rick Wagoner, and the two companies would keep joint projects, including the development of hybrid vehicles and a joint venture for sports utility vehicles in Canada.
The GM-Suzuki partnership dates to 1981 but those ties loosened after GM sold a 17% stake in Suzuki in 2006, leaving it with 3%.
GM lost $2.5bn in the third quarter and warned that it could run out of cash in 2009 if the U.S. economic slump continues and it
doesn't get government help.
The carmaker plans to lay off about 3,600 workers beginning early next year as it slows production at 10 of its assembly plants.