GM Buckles
It looks as though GM has decided to go ahead and meet Fiat's demand for protection money to avoid a protracted legal battle. Analysts had estimated that Fiat would want about $2 Billion to make it to the next fill-up, and lo and behold! that's what they got.
GM can pay the cash, although unhappily, and the bond market analysts, those little engines of profit themselves, didn't seem to like the effect on the balance sheet. GM is hovering just above junk status, for the moment. Any new long-term debt is going to cost almost 2.5% more than comparable Treasuries. Ouch!
This whole thing was a disaster beginning to end, despite GM's attempts to put a happy face on it. The spent money to get in, lost money on they way, and got maneuvered into almost doubling their loss to get out.
Posted by joshuasharf at February 14, 2005 06:39 PM
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