GM says Isuzu Motors’ banks to help ‘tremendously’

Detroit, Jan 7: General Motors Corp. said it was making every effort to ward off the possibility of bankruptcy for its troubled truck-maker, Isuzu Motors Ltd, and said that Isuzu’s banks would help “tremendously.” Isuzu, 49 per cent owned by GM, has been battered in both the stock and bond markets over the past month as investors fretted over credit risks for debt-ridden companies with links to weaker banks. “The banks are going to help tremendously, and General Motors from a commercial standpoint is helping,” said head of GM’s Asia-Pacific operations Rudy Schlais. “We’re making every effort for (bankruptcy) not to happen,” Schlais said in an interview at the auto show in Detroit, noting that bankruptcy was not a desirable option in Japan. “If you go into the Japanese system, that is not what you want to do. That would be very difficult, especially with a company of Isuzu’s magnitude from a standpoint of world market.”

Mr Schlais said that GM did not intend to inject further capital into the truck maker, but was confident of the support of Isuzu’s banks.
Isuzu, which has been hit by the stagnant Japanese truck market and falling sales of its sport utility vehicles in the United States, introduced a three-year reform plan last May aimed at slashing its debt load and cutting capacity. But shares of Isuzu sank below the symbolic 100 yen level in November over worries whether it would be able to execute the turnaround plan following a third straight year of financial losses. Isuzu’s main bank is Dai-ichi Kangyo Bank, a member of Mizuho Holdings Inc. Isuzu has said that it has received a credit line of 50 billion yen until the end of the current business year in March from DKB.

Mr Schlais said that DKB is helping to alleviate some of the financing pressures exerted by smaller lenders.

— Reuters