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BREAKING: GM to begin repaying $6.7 billion in U.S. loans next month
by Damon Lavrinc on Nov 16th 2009 at 12:01AM 
General Motors will announce later today plans to repay the U.S. government some $6.7 billion in loans ahead of its initial due date of July 2015. The payments are expected to begin as early as next month, with $1 billion paid each quarter until the full sum is paid – although that doesn't cover the total $50 billion the taxpayers have "invested" in the automaker after it declared bankruptcy earlier this year.
However, as the Washington Post points out, the amount the government will get back from GM depends on the value of the General's stock. With $6.7 billion in debt, $2.1 billion preferred stock and a 61 percent stake in the automaker, the $50 billion total is a long way off from being paid in full. And when GM reports its financial results tomorrow, it's not expected to show a profit, although the overall picture could be slightly better than anticipated.
[Sources: Washington Post, Detroit News | Image: Bill Pugliano/Getty]
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Reader Comments (Page 1 of 4)
click_playaz 12:04AM (11/16/2009)
Phew, Good news...
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Chris O 12:28AM (11/16/2009)
I agree, this is good news.
I'm sure the haters and trolls will come out, but most of them thought that the government (and us as a people), weren't ever going to get even a single cent back. Considering GM is starting to pay back their loans over 5 years early, there's the additional bonus of opportunity cost. After all, assuming a minimum IRR of 5%, the OC of the funds paid back by 2015 should be substantial.
Chris O 12:29AM (11/16/2009)
I agree, this is good news.
I'm sure the haters and trolls will come out, but most of them thought that the government (and us as a people), weren't ever going to get even a single cent back. Considering GM is starting to pay back their loans over 5 years early, there's the additional bonus of opportunity cost. After all, assuming a minimum IRR of 5%, the OC of the funds paid back by 2015 should be substantial.
Chris O 12:30AM (11/16/2009)
Argh. Posting fail.
ebleyes 2:08AM (11/16/2009)
The title of the article is misleading, but nonetheless this is good news. I've a soft spot for GM because I like their cars of late and I can't wait for their future products,from all the major car manufacturers I think they hold the most exciting concepts and technologies and if they play their cards right they might shock us ( in a good way) with their cars in the coming years.
Paul 9:17AM (11/16/2009)
Chris you may have a posting fail but your analysis is spot on.
This is good for us as taxpayers and GM as a company.
http://everyroadtaken.wordpress.com
MasterD 9:38AM (11/16/2009)
Nah, the argument was never about whether or not GM would be able to pay back the billions of dollars that they were loaned to, it was about why should they get bailed out? All of this money never created any new jobs, but all it did was keep the existing jobs in an industry that has already established itself and is somewhat stable. We could have given all of that money to an upcoming industry or even one that has not been fully established yet. Therefore, think about this for a minute and then see if it was still the smart thing.
Polly Prissy Pants 9:44AM (11/16/2009)
So how do you declare bankruptcy, borrow money to keep going, lose $1.2 billion a quarter and start paying back your loan?
http://www.msnbc.msn.com/id/33961851/ns/business-autos/
Are they making a loan payment with borrowed money? Something about this doesn't add up.
notYou 11:10AM (11/16/2009)
@ Polly Prissy Pants: "So how do you declare bankruptcy, borrow money to keep going, lose $1.2 billion a quarter and start paying back your loan? ... Something about this doesn't add up."
Not only that, but the Fed just subsidized the biggest sales month of the year with the Cash-4-Clunkerz! debacle. Can you imagine what the numbers would really look like if GM had been responsible for plunking down ~3-4k per deal of their own (err, borrowed) cash instead of we - the taxpayers - having done it?
Oh, I forgot, we're in HopeNChangeNBaitNSwitch fantasyland.
ngiotta 11:11AM (11/16/2009)
@ Polly: They are paying this back with other funds they've been loaned by the government-- that's how they're doing it. Reminds me of people I know that pay their bills with their credit cards.
Judy Zik 11:53AM (11/16/2009)
They should just take it out of their marketing budget. Since this is for the most part just really good PR. The government money is has got to be their lowest interest credit line so paying it back early makes no financial sense.
High 12:09AM (11/16/2009)
I will take six please.
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Hazdaz 12:09AM (11/16/2009)
It's a long ways away, but it's a start...
...and I think a big fat middle finger is in order for all those idiots that weren't willing to give them the money to stay in business which would have pretty much guaranteed that this extremely severe recession would have been even worse.
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The Other Bob 8:55AM (11/16/2009)
Considering this is money owed by the old GM that, from a legal perspective, didn't even have to be paid back yes, this is good PR to the naysayers.
happyfun86 12:10AM (11/16/2009)
Well, at least GM's doing SOMETHING. I mean, decent news is a lot better than bad news, right?
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Jimbo 12:16AM (11/16/2009)
Something tells me we won't hear a similar statement from Chrysler any time soon.
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Yaroukh 5:15AM (11/16/2009)
1) Chrysler has been given less in the loans
2) Chrysler promised to repay more (12.5 to US, 3.8 to CAN; by 2014)
Art 12:41AM (11/16/2009)
in leftover Cobalts
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tanooki2003 8:31AM (11/16/2009)
You mean leftover pontiac G3s
hokieman09 12:49AM (11/16/2009)
Wow that's quicker than I expected
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