GM belt tightening is as much about PR as profits

General Motors’ vow to freeze some travel and other discretionary spending isn’t likely to send any Wall Street analysts rushing to tweak their profit forecasts.

GM told employees over the weekend that it’s tightening the belt to preserve cash as it gauges the fallout from the disaster in Japan.

At a company with $26.6 billion in cash and securities, and a projected $5.7 billion in free cash flow this year, savings from such a spending freeze would amount to little more than a rounding error.

But the decision is a chance for GM to show its new shareholders that it is being careful with every dime.

It’s not a bad move for a company 20 months removed from bankruptcy and one that told prospective investors just last summer that it doesn’t have a handle on its own finances. (GM recently said its financial controls are up to snuff).

Even if immaterial, it’s probably a welcome sign for investors, dealers, suppliers and anyone else who’s counting on execs at the “new GM” to run a more-disciplined, diligent company.

ATTENTION COMMENTERS: Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Email Newsletters
  • General newsletters
  • (Weekdays)
  • (Mondays)
  • (As needed)
  • Video newscasts
  • (Weekdays)
  • (Weekdays)
  • (Saturdays)
  • Special interest newsletters
  • (Thursdays)
  • (Tuesdays)
  • (Monthly)
  • (Monthly)
  • (Wednesdays)
  • (Bimonthly)
  • Special reports
  • (As needed)
  • (As needed)
  • Communication preferences
  • You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.