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Thread: GM Pays Off Debt to U.S.
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04-21-2010, 08:16 AM #1
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GM Pays Off Debt to U.S.
GM Pays Off Debt to U.S.
Associated Press
General Motors Co. has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, a move its CEO says is a sign automaker is on the road to recovery.
DETROIT -- General Motors Co. has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, a move its CEO says is a sign automaker is on the road to recovery.
GM CEO Whitacre formally announced the loan paybacks Wednesday at the company's Fairfax Assembly Plant in Kansas City, Kansas, where he also announced that GM is investing $257 million in that factory and the Detroit-Hamtramck plant, both of which will build the next generation of the midsize Chevrolet Malibu.
GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. The U.S. considered as a loan $6.7 billion of the aid, while the Canadian governments held $1.4 billion in loans.
The U.S. government payments, made Tuesday, came five years ahead of schedule, and Whitacre said they are a sign that the automaker is on its way toward reducing government ownership of the company. The payments on the Canadian loans were also made Tuesday.
GM still owes $45.3 billion to the U.S. and $8.1 billion to Canada, money it received in exchange for large stakes in the company. The U.S. government now owns 61 percent of the company and Canada owns roughly 12 percent. GM plans to repay both with a public stock offering, perhaps later this year.
"Nobody was happy that GM needed government loans — not the governments, not the taxpayers and, quite frankly, not the company," Whitacre wrote in an op-ed article that appeared on The Wall Street Journal's Web site Tuesday night. "We believe we can best thank the citizens of the U.S. and Canada by making sure that their investments are hard at work every day, building high quality, fuel-efficient vehicles."
The factory investments in Kansas and Michigan will not create any new jobs, but will preserve jobs at both plants. The Kansas plant, which employs 3,869 workers, also builds the midsize Buick LaCrosse luxury sedan. The Detroit-Hamtramck plant, which has 1,048 employees, now builds the Cadillac DTS and Buick Lucerne large sedans and is gearing up to make the Chevrolet Volt rechargeable electric car.
During the financial crisis that led to GM filing for bankruptcy protection last year, the automaker closed 14 factories and shed more than 65,000 blue-collar jobs in the U.S. through buyouts, early retirement offers and layoffs. The company now employs about 40,000 hourly workers in the U.S.
Preserving jobs at the two GM plants won't help the nation's unemployment picture, but it won't make it worse.
Employers nationwide in March added 162,000 jobs, the most in three years. But the pace of the economic recovery and job creation won't be robust enough to quickly drive down the unemployment rate. It's been stuck at 9.7 percent for three months, close to its highest levels since the 1980s.
GM had made about $2 billion in loan payments to the U.S. government and $384 million to Canada in December and March, and had promised to repay the full loans by June. But company officials have said its cash flow, mainly from the sales of newer models, has been better than expected, allowing it to make the remaining $5.8 billion in payments early.
Repaying the loans has been a top priority for Whitacre.
GM officials say the company's public stock offering will take place when the markets and the company are ready. They will not predict how much of the remaining government debt will be repaid from the stock offering, but said it likely will take years for the governments to divest themselves fully.
The stock offering hinges on GM posting a profit, which Whitacre has said could come this year. GM lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion. After the event at the Kansas City plant on Wednesday, Whitacre heads to Washington, where he is scheduled to meet with House Speaker Nancy Pelosi and other lawmakers.
http://www.foxnews.com/leisure/2010/04/21/gm-pays-debt/
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04-21-2010, 09:23 AM #2
good...now maybe all these dopes will stop calling it "government motors." and perhaps we will see the revival of the impala ss either in the current platform or a rwd platform (g8/commodore please oh please) as well as the z28 coming out in a year or so.
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04-21-2010, 09:35 AM #3
awesome
I wonder if toyota's trouble had something to do with better gm sales
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04-21-2010, 09:39 AM #4
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04-21-2010, 09:45 AM #5
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04-21-2010, 09:48 AM #6
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04-21-2010, 09:48 AM #7
i wish the other companies would pay off their debt instead of publishing their quarterly profits.
I also wish they made the Maloo (Pontiac SUT)
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04-21-2010, 09:55 AM #8
The G'ment will always have a hand in what GM does now. They made a deal with the devil to stay afloat, thats for sure.
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04-21-2010, 10:15 AM #9GM Pays Off Debt to U.S.
General Motors Co. has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments ...
GM got a total of $52 billion from the U.S. government
GM still owes $45.3 billion to the U.S.
The U.S. government now owns 61 percent of the company
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04-21-2010, 10:22 AM #10
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04-21-2010, 10:34 AM #11
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04-21-2010, 10:38 AM #12
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Or Government Mandated.
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04-21-2010, 10:52 AM #13
another government motors "dope" here. my wife's 2009 G6 will be our last GM. i'll buy ford from now on.
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04-21-2010, 11:06 AM #14
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'05 Harley - 21k m- '98 Z28 black - 69k mi
I want to purchase something new from GM.
But yet, I has not enough cash.
Cadillac CTS-V
Tahoe
Camaro SS
the outlook still looks gloomy for Lime, as I'm still trying to keep what I've aquired with my earning still way way way below where I was. .
I'm still earning 1996 money and trying to survive in 2010.
sssiiiiggggghhhhhh
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04-21-2010, 02:38 PM #15
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04-21-2010, 03:39 PM #16
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04-21-2010, 03:42 PM #17
"GM still owes $45.3 billion to the U.S. and $8.1 billion to Canada, money it received in exchange for large stakes in the company."
Apparently not nearly payed off...
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04-21-2010, 03:57 PM #18
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- gmcheviac
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04-21-2010, 04:08 PM #19
Yea, thats great.
I've actually heard that they are doing a bit better with their sales as of late. I guess this is proof. Good news for sure.Last edited by Transamws6; 04-21-2010 at 04:14 PM.
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04-21-2010, 04:20 PM #20
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