GM suspends dividends, share repurchases in coronavirus pandemic
Auto maker says it extended $3.6 billion under its three-year revolving credit agreement to April 2022
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General Motors Co. said it has suspended its quarterly cash dividend and share-buyback program as it seeks to conserve cash amid the coronavirus pandemic.
The auto maker on Monday also said it extended $3.6 billion under its three-year revolving credit agreement to April 2022. The company previously extended its $2 billion 364-day agreement to April 2021.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GM | GENERAL MOTORS CO. | 55.59 | +0.09 | +0.16% |
GM said it would still reinvest pretax returns equal to or more than 20% into its business and focus on maintaining an investment-grade balance sheet. Its capital allocation framework calls for returning capital to shareholders after those two goals are met.
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Major car companies have reported a drop in sales for the first three months of the year as the pandemic spread across continents. GM earlier this month reported a 7% decline in U.S. sales for the first quarter, saying strong results in January and February were more than offset by the effect of the health crisis in March, when Covid-19 cases in the U.S. shot up and shelter-in-place measures escalated.
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The auto industry has stepped up to convert plants into medical-supply factories as U.S. hospitals face shortages. GM earlier this month said it was making 30,000 ventilators for the national stockpile in a $489.4 million contract with the Department of Health and Human Services, while Ford Motor Co. said it was working to make 50,000 ventilators by early July.