General Motors (GM) Suspends Its Dividend ... Again

GM stock's high yield suddenly vanishes as the automaker suspends payout, share repurchases amid coronavirus crunch

Markham, Ontario, Canada - June 14, 2019: GM Canada Technical Centre campus in Markham, Ontario, Canada. General Motors Company is an American multinational corporation.
(Image credit: Getty Images)

The coronavirus outbreak has taken its toll on yet another publicly traded company's cash distribution. General Motors (GM, $21.95) announced early April 27 that it was suspending its dividend – the company's second such move in 12 years.

GM stock, which also was forced to suspend its dividend during the Great Recession, put the pause on its 38-cent-per-share quarterly payout as one of several steps meant to fortify the company's balance sheet. General Motors also extended $3.6 billion of its three-year revolving credit agreement to April 2022, which comes roughly a week after it renewed a $1.95 billion 364-day revolving facility for use by its GM Capital arm.

GM also suspended its share repurchase program and has taken "other significant austerity measures.

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"We continue to enhance our liquidity to help navigate the uncertainties in the global market created by this pandemic," GM Chief Financial Officer Dhivya Suryadevara said in a statement. "Fortifying our cash position and strengthening our balance sheet will position the company to create value for all our stakeholders through this cycle."

General Motors' announcement comes amid a host of other dividend cuts and suspensions prompted by the COVID-19 outbreak. That includes Ford (F), which halted its dividend in mid-March.

The automotive industry in general is feeling an acute pinch from the coronavirus. During the final week of March, U.S. retail auto sales plunged 59% from J.D. Power's pre-pandemic forecast. The figure has been stabilizing – to 55%, 51% and 48% drops over the next few weeks – but still bodes poorly for automakers.

Meanwhile, General Motors and other automakers' North American plants have been shuttered since late March, with the exception of a few recent reopenings to manufacture ventilators. While they're trying to determine a plan and timetable for reopening for automaking purposes, they'll do so into an uncertain demand climate.

At current prices, GM stock would have yielded 6.9%.

Kyle Woodley

Kyle Woodley is the Editor-in-Chief of Young and The Invested, a site dedicated to improving the personal finances and financial literacy of parents and children. He also writes the weekly The Weekend Tea newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.

Kyle was previously the Senior Investing Editor for, and the Managing Editor for before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism. 

You can check out his thoughts on the markets (and more) at @KyleWoodley.