GM Expects To Net $5.4B From Allison Sale
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General Motors Corp., raising cash for new models, said it expects a gain of as much as $5.4 billion this quarter from the sale of the Allison Transmission unit to buyout firms Carlyle Group and Onex Corp.
The sale, completed last week for $5.6 billion, may increase earnings by a range of $5.1 billion to $5.4 billion, the Detroit-based automaker said in a U.S. regulatory filing yesterday. Allison, based in Indianapolis, makes transmissions for trucks, buses, and military equipment, and has 3,400 employees.
With the Allison transaction, GM will have generated as much as $21.4 billion from asset sales since 2005, as the chief executive officer, Rick Wagoner, pays for buyouts of union workers, plant closings, and development of new models. The automaker had annual losses of $12.4 billion the past two years and has said it doesn’t expect to produce money from operations this year.
Proceeds from Allison will help GM invest in new products and technology, the automaker reiterated yesterday.
GM said last month that it had $27.2 billion in cash, marketable securities, and funds available from a retiree health care fund as of June 30, an increase from $24.7 billion in March.
