GM To Cut $11B In Debt, Pension Obligations
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General Motors is taking steps to be a more attractive to potential private investors. The automaker Thursday announced it is cutting its debt and pension obligations by $11 billion. GM will buy back nearly $3 billion in stock, put another $6 billion into its pension plans and paid back a big loan to the UAW.
Automotive industry expert, Keith Craine. tells WWJ company is trying to look more attractive to potential investors when the public offering of stock is offered next month.
“They’re looking to make Wall Street see what they’re doing and saying this is a lot better deal that I would’ve been without doing these things,” said Craine.
“General Motors is trying to clean up their ballence sheet for the pending IPO that they’re going to be having in just a few weeks,” Crain said.
Craine said General Motors is, in fact, in better shape and he believes the turnaround is real.
WWJ Automotive Analyst John McElroy says a lot of people are watching GM right now.
“There’s no question that GM is under a lot of criticism for having taken $50 billion from the federal government. But this latest move, on top of other previous moves, shows that GM is committed to paying back that money to the government,” McElroy said. “That’s a lot of money to put down,” he said.
The U.S. government remains GM’s largest shareholder.
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