GM payments come 5 years early

April 20th, 2010 by canadianpontiacguy

GM chief executive officer Ed Whitacre made a loan repayment announcement at the company’s Fairfax assembly plant in Kansas City, Kan., 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 $6.7 billion of the aid to be a loan, while the Canadian governments held $1.4 billion in loans.

Payments come 5 years early

“This is years ahead, about five years ahead of the original loan schedule,” said Whitacre, who added the repayments are a sign that the automaker is on its way toward reducing government ownership of the company.

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 9,000 people in Canada and about 40,000 hourly workers in the U.S.

Company officials have said its cash flow, mainly from the sales of newer models, has been better than expected.

“We are able to repay the taxpayer because we are designing, building and selling the best cars and trucks GM has produced. Ever,” said 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.

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