RAYONG, Thailand (Reuters) - GM chief Rick Wagoner said there was significant interest in the auto maker’s planned sale of up to $4 billion of assets as it battles record losses and falling sales, but no deals were expected soon.
General Motors Corp is struggling against an accelerating downturn in its home market and high oil prices that have hammered sales of its trucks and SUVs, triggering a $15.5 billion quarterly loss, the third-largest in its 100-year history.
Chief Financial Officer Ray Young has said GM is on track to free up $15 billion in liquidity with cost-cutting, asset sales and new borrowing under a July plan intended to reassure investors that the car maker can ride out the downturn. “Frankly, we are getting some significant interest in our asset sales, including Hummer, but probably it won’t be concluded imminently,” GM chairman Wagoner told a news conference at the launch of a new diesel engine plant in eastern Thailand.
Earlier this month, sources told Reuters GM was in talks with India’s Mahindra & Mahindara Ltd and automakers in Russia and China about selling its Hummer brand.
GM, which has lost more than $51 billion over the past three years, said in June it was reviewing the gas-guzzling Hummer, which has hurt GM’s image at a time when consumers demand more fuel efficiency. Hummer’s U.S. sales fell 40 percent in the first half of the year.
The company, which has said it needs a minimum of $11-$14 billion to run its global operations, has not said what other assets it is considering selling.
It has said it has the cash needed through 2009, even if industry-wide U.S. auto sales drop by 13 percent this year and hold flat next year, as many analysts predict.
GM is realigning its North American production to reflect a U.S. auto market reeling from an oil shock being compared to those of the 1970s. It plans to close four North American truck plants and add shifts at two U.S. plants that build more popular cars that get better mileage.
Growth in emerging markets such as India and China is crucial for the struggling auto maker, which is battling softer sales in the U.S. market, the world’s largest.
At the launch of the engine plant, part of a $445 million boost to its Thai operations, Asia-Pacific President Nick Reilly said GM was on track to sell 1.2 million units in China this year. It sold a record 1.03 million vehicles in China in 2007.
Thailand is GM’s biggest auto assembly base in Asia, with top-selling models including the Chevrolet Captiva and Optra.
The engine plant is due to start production in 2010, will employ 440 workers and have the capacity to produce more than 100,000 2.5 liter and 2.8 liter turbo diesel engines each year.
GM shares have more than halved this year, compared with a fall of around 12 percent in the Standard & Poor’s 500 index.
Writing by Ed Cropley: Editing by Alan Raybould & Ian Geoghegan