Automakers and suppliers continue tapping credit lines and securing billions in cash to protect themselves from an unknown number of weeks ahead of big expenses against virtually no income.
Cash reserves are taking center stage for manufacturers waiting out coronavirus-caused shutdowns around much of the world — even as the U.S. government and central bank assure businesses and consumers that an ocean of cash will be widely available.
Many in the industry fear that the restart of production, whether it comes in 30 days or 90, will require vast amounts of spending to recall workers, respark supply chains and bring production lines back.
Last week, Nissan Motor Co. was reported to be pursuing $4.6 billion in bank loans to help it weather the pandemic interruption. The Japanese business daily Nikkei said Nissan is seeking the money from a group of banks, but the automaker did not confirm the report.
Similarly, Nissan's alliance partner Renault intends to seek about $5.5 billion in government-backed loans in France, Chairman Jean-Dominique Senard said in a radio interview last week, according to a Bloomberg report.
Those moves follow recent plays by General Motors and Ford Motor Co. to bolster their cash positions. GM has tapped a $16 billion credit line, and Ford unlocked a $13.4 billion corporate credit facility, with a $2 billion credit line on top of that.
Seating and electronics supplier Lear Corp. said last week it has "ample liquidity," but drew down $1 billion from its $1.75 billion revolving credit facility to supplement its cash position of $1.5 billion.
