BMW tapped U.S. Fed for $3.6B during credit crunch
To support its North American operations, BMW borrowed $3.6 billion from the U.S. Federal Reserve in 2009.
Domestic automakers weren't the only ones to have benefited from the United States Federal Reserve over the last two years. According to new data released to the media yesterday, BMW made "intermittent" use of the Federal Reserve's Commercial Paper Funding Facility in 2008 and 2009.
BMW used $3.62 billion on January 30, 2009, in part to expand its South Carolina assembly plant, as well as to support sales of new cars in the automaker's second largest market. BMW invested $750 million into the assembly plant in order to assemble its X3 compact SUV, which just began production.
"We tapped into this program in 2008 and 2009 during the financial crisis like other companies," BMW's Matthias Schmidt told reporters in Munich. "It supported our financial profile and offered us an additional funding source, especially at times when the money markets and capital markets did not function properly and efficiently."
BMW reported its lowest profit in a decade last year - around $270 million - but it recorded around $2 billion in free cash flow thanks to its ability to access low interest loans from the U.S. government.
"The diversified and international treasury operations helped to deal with these challenges," Schmidt said.
1.'BMW tapped $3.6 billion...' view