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G.M. Sells Suzuki Stake in Its Effort to Raise Cash
TOKYO (AP) — General Motors will sell its entire stake in Suzuki Motor Corporation, the Japanese automaker, for 22.37 billion yen ($230 million), G.M.'s latest move to stay afloat while awaiting a decision from Washington on aid for the industry.
Suzuki said Monday that it would buy back the 3.02 percent stake from the American auto giant, which is seeking a $25 billion government lifeline, together with the Ford Motor Company and Chrysler, to weather the deepening economic crisis.
Hit by the worst sales slump in more than 25 years and frozen credit, G.M. has warned that it might not survive through the year's end without the federal government's financial support.
Some Republican opponents of a bailout have branded the auto industry a "dinosaur" whose "day of reckoning" is near, while Democrats on Sunday pledged to try to get Detroit a slice of the $700 billion originally earmarked for a Wall Street rescue.
Suzuki said G.M.'s stake sale was necessary for the ailing American automaker to raise capital, but the Japanese company insisted it would continue a business partnership with G.M.
"We fully understand the necessity for G.M. to raise cash," Suzuki's chief executive, Osamu Suzuki, said in a statement. He said he was in close contact with Rick Wagoner, G.M.'s chief executive, and the two companies would keep joint projects, including the development of hybrid vehicles and a joint venture for sport utility vehicles in Canada.
The partnership dates to 1981 but those ties loosened after G.M. sold a 17 percent stake in Suzuki in 2006, leaving it with 3 percent.
G.M. reported on Nov. 7 that it lost $2.5 billion in the third quarter.
