TOKYO – General Motors Corp., a struggling U.S. automaker, will sell its entire stake in Suzuki Motor Corp. for $230 million to raise cash, the Japanese company said Monday.
Suzuki said it would buy back a 3.02 percent stake from the American auto giant, which is seeking a $25 billion government lifeline, together with Ford Motor Co. and Chrysler LLC, to weather the deepening economic crisis.
Hit by the worst sales slump in more than 25 years and frozen credit, GM has warned that it might not survive through year's end without the U.S. government's financial support.
Suzuki said GM's stake sale was necessary for the ailing American automaker to raise capital, but the Japanese company insisted it would continue a business partnership with GM.
"We fully understand the necessity for GM to raise cash," Suzuki chairman and chief executive Osamu Suzuki said in a statement. He said he was in close contact with GM chief executive Rick Wagoner, and the two companies would keep joint projects, including the development of hybrid vehicles and a joint venture for sports utility vehicles in Canada.
The GM-Suzuki partnership dates to 1981 but those ties loosened after GM sold a 17 percent stake in Suzuki in 2006, leaving it with 3 percent.