General Motors CFO Dhivya Suryadevara and CEO Mary Barra told employees in a webcast Thursday they needed to take "immediate, aggressive" cost-cutting steps, Reuters reported.
In Chicago, Boeing CFO Greg Smith said on Tuesday the U.S. aerospace industry urgently needs credit to cope with the pandemic, but "markets essentially are closed" to new debt.
- The two industries, motor vehicles and airlines, are taking some of the pandemic's hardest hits, as they weather once in a century supply chain disruptions and steep drops in business.
Suryadevara warned GM's long-term viability risks serious damage if they don’t take "significant austerity measures," according to Reuters.
Barra told employees the automaker, the largest in the U.S., is "aggressively taking costs out of the business wherever we can by suspending work on some product programs, and cutting our marketing budgets, and hundreds more actions."
In recent days, the government has tasked GM with producing much-needed ventilators in its domestic manufacturing plants.
On Friday morning, President Trump, in a flurry of tweets, criticized GM and Barra for their response to producing the ventilators and signaling the possibility of invoking the Defense Production Act, which would force GM to produce the equipment by law.
As usual with “this” General Motors, things just never seem to work out. They said they were going to give us 40,000 much needed Ventilators, “very quickly”. Now they are saying it will only be 6000, in late April, and they want top dollar. Always a mess with Mary B. Invoke “P”.— Donald J. Trump (@realDonaldTrump) March 27, 2020
At Boeing, which has sought $60 billion in government loans since the pandemic took hold, concerns about credit reflect dire circumstances similar to GM’s.
On Tuesday, CEO Dave Calhoun, who started at the company just two months ago, told Fox Business Boeing could "take a different course" if lawmakers "attach too many things" to a stimulus package.
In an interview with Reuters, Smith said Boeing would not be adding new commercial debt facilities anytime soon. "The markets essentially are closed," he said. "I mean, there’s really not much opportunity to raise any additional debt. That’s one of the challenges."
Despite the harrowing situation stateside, Smith said Boeing was beginning to see recovery signs in China, where they manufacture many of their products, he told Reuters.