General Motors said Monday it has suspended its quarterly cash dividend on its common stock and its share buybacks to save cash in the face of the coronavirus crisis.
The company has also expanded its cash options by extending a three-year revolving credit agreement for $3.6 billion to April 2022. Earlier this month GM and GM Financial, its captive finance company, also extended a $2 billion 364-day revolving credit agreement to April 2021. In March, GM pulled $16 billion from existing credit lines, doubling its cash reserve.
Last month Ford Motor Co. suspended its dividend and tapped credit lines to raise additional cash.
GM last paid a quarterly dividend on March 5 of 38 cents a share.
“We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic,” GM CFO Dhivya Suryadevara said 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.”
Shares of GM were down 1 percent to $21.73 in early trading Monday.
In March, GM temporarily reduced paychecks for all salaried employees globally by 20 percent to conserve cash but promised to make up for the lost income within a year. The pay deferments started April 1 and could last about six months. Executives and GM’s board took additional compensation cuts that will not be repaid.
GM has not announced a restart date for its North American plants, which have been closed for more than a month to prevent the spread of the coronavirus and comply with state-by-state orders.
The UAW last week said restarting U.S. auto production in early May, a target much of the industry had been aiming for, would be “too risky” for workers and their families.
Hannah Lutz of Automotive News and Reuters contributed to this report.
