(DETROIT) General Motors Corp.'s treasurer said Wednesday that the automaker is planning to put its Strasbourg, France, manufacturing operation and its Hummer truck brand up for sale, and it may announce more asset sales later this year.
Company Treasurer Walter Borst said in a slide presentation at the Deutsche Bank Leveraged Finance Conference that the company expects to distribute marketing materials for both operations in October.
The slides posted on GM's Web site Wednesday say the assets under review are worth $2 billion to $4 billion. The presentation also says GM continues to review other asset sales and will make more announcements in the fourth quarter.
"We believe that we can monetize certain assets without impacting the strategic direction of the company," Borst said during his presentation, which was posted on GM's investor Web site.
GM and other automakers have faced liquidity problems as losses have mounted and U.S. sales have declined. GM announced a plan in July to cut $10 billion in costs and raise another $5 billion through asset sales and borrowing through the end of next year.
On Friday, the nation's largest automaker gave notice that it would draw the remaining $3.5 billion of a $4.5 billion revolving credit facility to boost its liquidity.
Borst said GM expects the global market to grow from 70.6 million in sales last year to more than 75 million in 2010, and says GM is positioned to capture that growth in emerging markets. The growth, coupled with cost cuts, factory capacity reductions and other management decisions, will set the stage for improved financial results by 2010, he said.
By 2010, GM will sell two-thirds of its vehicles outside the U.S., compared with 59 percent in 2007, he said.
He said GM plans to reduce its North American structural costs from $33.2 billion in 2007 to $26 billion to $27 billion in 2010. That figure includes savings from shifting retiree health care costs to a trust administered by the United Auto Workers, although the accounting of those savings could change, he said.
By 2010, the company also expects to reduce its hourly health care costs by more than $2 billion. The company spent $3.8 billion in 2007, he said.
Borst said GM is shoring up its liquidity and has the scale to be well positioned for an industry rebound.
"We're making changes to compete and win in what we think is an industry revolution," he said.
6 months ago