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GM To ‘Repay’ Government $6.7 Billion

From a strangely forgiving Associated Press:

CEO: GM to repay government loans by end of June


December 15, 2009

DETROIT — General Motors Co. plans to pay all of its $6.7 billion in government loans by the end of June, Chairman and CEO Ed Whitacre Jr. said Tuesday.

The automaker plans to make quarterly installments starting this month with a $1.2 billion payment, Whitacre said. He said GM could repay the loan sooner but that hasn’t been decided.

GM has received $52 billion total in aid from the government as it navigated bankruptcy protection earlier this year. Of that total, $45.3 billion was converted into equity, giving the government a 61 percent stake in the automaker

GM will pay interest on the $6.7 billion loan with a floating rate of about 7 percent. GM officials could not immediately provide an estimate of how much interest the company will pay to the government.

Isn’t General Motors still billions of dollars in the red? Just last month GM reported another $1.2 billion dollar loss.

How is it possible that they can pay anyone back?

The GM execs don’t even have the motivation of being able to give themselves bonuses once they are out from under the government’s thumb, since they will still be owned by Mr. Obama.

But will the White House turn around and use this money to create and save more government jobs? Come to think of it, isn’t working for GM a government job?

The GM chairman took over as CEO on Dec. 1 after Fritz Henderson abruptly resigned following differences with the board over the direction of the company.

Whitacre said GM has no candidates yet to replace Henderson. He said government pay restrictions will make the search for a new CEO more difficult, but he is confident the company can still find a strong leader.

He said GM’s board will search inside and outside the company for a replacement. Auto experience would be helpful but it is not a requirement, he said.

No, why should auto experience be necessary? Mr. Whitacre proved that.

Besides, just look at what a bang up job Mr. Obama is doing as President.

And he had never held an executive position in his long and storied life.

(Thanks to BillK for the heads up.)

This article was posted by Steve on Wednesday, December 16th, 2009. Comments are currently closed.

5 Responses to “GM To ‘Repay’ Government $6.7 Billion”

  1. BillK says:

    But somehow they would have ceased to exist if they had entered bankruptcy?

    From the Associated Press department of misleading headlines:

    GM to Repay Its $6.7B Government Loan by End of June

    DETROIT — General Motors chairman and CEO says GM plans to repay all of its $6.7 billion in government loans by the end of June.

    Ed Whitacre Jr. says the company plans to make quarterly installments starting this month with a $1.2 billion payment. He says it could repay sooner but that hasn’t been decided…


    Yeah, what about that pesky $45.3 billion that resulted in Obama taking charge?

    Just forget that

  2. proreason says:

    “How is it possible that they can pay anyone back?”

    Government accounting

  3. Liberals Demise says:

    Ali Bama sees another 6.7 Billion that he can give away.

  4. BigOil says:

    If there was ever any doubt a government run GM would roar back to prosperity, this ad for the Volt should quiet the naysayers. It can best be described as “Solid Gold”.


  5. Rusty Shackleford says:

    Meanwhile, back at the ranch….

    The AP lets this out:

    GM to discontinue Saab after deal talks collapse


    By DAN STRUMPF, AP Auto Writer Dan Strumpf, Ap Auto Writer – 33 mins ago

    NEW YORK – General Motors Co. said Friday it will wind down Saab after talks to sell the brand to Dutch carmaker Spyker Cars collapsed.

    GM said in a news release that issues arose during the sale talks that could not be resolved.

    “Despite the best efforts of all involved, it has become very clear that the due diligence required to complete this complex transaction could not be executed in a reasonable time,” GM Europe President Nick Reilly said in a statement. “In order to maintain operations, Saab needed a quick resolution.”

    GM was scheduled to provide more details during a conference call with reporters Friday morning. The Detroit automaker said it will continue to honor Saab customer warranties.

    GM first sought a buyer for Saab in January as part of its restructuring, which included plans to downsize its brands to four from eight. It was previously in talks to sell Saab to a consortium led by the Swedish sports car maker Koenigsegg Group AB, but it turned to Spyker after Koenigsegg withdrew from the talks in November.

    Speculation has since been rampant on the future of Saab. Earlier this week, GM Chairman and CEO Ed Whitacre told reporters he had “a sense it’s possible” that the sale to Spyker would go through, but conceded the brand would close by the end of the year if the talks fell apart.

    On Monday, China’s Beijing Automotive Industry Holdings — originally part of the Koenigsegg consortium — announced it had agreed to buy some powertrain technology from Saab. It gave no details of costs or timing of that purchase.

    So Saturn, Opel and now SAAB. Though Opel is still trying to survive.

    But, they can pay the government back…and all that about bankruptcy was what, again?

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