GM to sell full stake in Suzuki

Source: Agencies  |   2008-11-18  |     NEWSPAPER EDITION

GENERAL Motors Corp, the struggling United States auto maker, will sell its entire stake in Suzuki Motor Corp for 22.37 billion yen (US$230 million) to raise cash, the Japanese company said yesterday.

Suzuki said it would buy back a 3.02 percent stake from the American auto giant, which is seeking a US$25 billion government lifeline, together with Ford Motor Co and Chrysler LLC, to weather the economic crisis.

Hit by the worst sales slump in more than 25 years and frozen credit, GM has warned that it might not survive to the year's end without the US government's support.

Suzuki said GM's stake sale was necessary for the ailing American auto maker to raise capital, but the Japanese company insisted it would continue a business partnership with GM.

"We fully understand the necessity for GM to raise cash," Suzuki chairman Osamu Suzuki said. He said he was in close contact with GM Chief Executive Rick Wagoner, and the two companies would keep joint projects, including the development of hybrid vehicles and a joint venture for sports utility vehicles in Canada.