General Motors will draw down $16 billion in credit, suspends 2020 outlook

General Motors CEO Mary Barra speaks to the news media June12, 2018 in Detroit, Michigan.

Bill Pugliano | Getty Images

General Motors said Tuesday that it intends to draw down $16 billion from its revolving credit facilities.

The company called it a “proactive measure” to preserve financial flexibility. GM expects to have between $15 billion to $16 billion in cash at the end of March.

“We are aggressively pursuing austerity measures to preserve cash and are taking necessary steps in this changing and uncertain environment to manage our liquidity, ensure the ongoing viability of our operations and protect our customers and stakeholders,” GM CEO Mary Barra said in a statement.

GM said that its financial services arm, GM Financial, expects to end the first quarter with about $24 billion in liquidity and is managing below its target leverage ratios.

The automaker is also suspending its 2020 outlook, citing the uncertainty caused by the coronavirus pandemic. GM has closed all of its North American factories until at least March 30.

Shares of GM were up 3% in premarket trading. The stock, which has a market value of $26.3 billion, has fallen 50% so far in 2020.

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