Whitacre: Remaining $5.8B in gov't loans paid back 5 years ahead of schedule

Zach Bowman — Wed, 21 Apr 2010 10:55:00 EST

Filed under: Government/Legal, Plants/Manufacturing, GM, Earnings/Financials, UAW/Unions

This morning, General Motors Chairman and CEO Ed Whitacre confirmed that the company has paid back a total of $5.8 billion in federal loans a full five years ahead of schedule. Whitacre attributed the company's ability to make the payment, with interest, to its new strategy and the success of new models like the Buick Lacrosse and Chevrolet Malibu.

GM received some $50 billion in loans from both the U.S. and Canadian governments, with the majority of those funds converted into company stock. The remainder totaled over $8 billion owed to the U.S. and Canadian governments, all of which has now been paid back less than a year after GM emerged from bankruptcy. The news was announced at a press conference at the company's Fairfax, Kansas manufacturing facility, which will soon add production of the hot-selling Chevrolet Malibu, and was attended by Kansas Governor Mark Parkinson and other members of government.

As it is, the federal government still owns 60.8 percent of GM, which means that whenever the company issues its IPO, the tax payers could easily get all of their money back.

[Image: Stan Honda/AFP/Getty]

Continue reading Whitacre: Remaining $5.8B in gov't loans paid back 5 years ahead of schedule

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GM asks Congress to kickstart its heart with ambitious plan

John Neff — Tue, 02 Dec 2008 16:29:00 EST

Filed under: Government/Legal, GM

General Motors has just revealed the plan it has submitted to Congress today, and the details show just how far the largest U.S. automaker is willing to go in order to secure bridge loans from the federal government. The plan includes selling Saab, possibly killing Saturn and scaling back Pontiac, as well as reducing dealers and shedding more workers, among other things. Here's the breakdown...

Focus on "core brands": Chevrolet, Buick, GMC and Cadillac
Launch predominately high mileage, energy-efficient cars and crossovers
Sell Saab, HUMMER
Sell or kill Saturn
Reduce Pontiac to a "niche" brand
Trim dealerships from 6,450 to 4,700
Reopen talks with UAW to cut manufacturing costs further
Reduce total workforce from 96,000 to 65-75,000
Negotiate with lenders, remove $35.6 billion in debt

To do all this, GM is asking for a total of $18 billion in loans, which is considerably more than the $10-12 billion that CEO Rick Wagoner requested in front of Congress a few weeks ago. It needs $12 billion in loans by the end of next March to make it through the rest of 2009 and another $6 billion in revolving credit if conditions don't begin to improve by then. The troubled automaker also states that it needs $4 billion by the end of this month to continue operating and intends to start repaying the loans by 2011.

In exchange for government loans, GM is also open to a government oversight board that would monitor how the money is used, as well as giving taxpayers a stake in the company. Also, not only would Rick Wagoner get his salary dropped to $1, a number of other unnamed senior execs would get pay cuts, too.

Is it all enough? Sound off in the comments after reading the official press release from GM after the jump.

[Source: GM, Automotive News - sub. req'd]

Continue reading GM asks Congress to kickstart its heart with ambitious plan

GM asks Congress to kickstart its heart with ambitious plan originally appeared on Autoblog on Tue, 02 Dec 2008 16:29:00 EST. Please see our terms for use of feeds.

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