General Motors has just announced that it has repaid the balance of its government loans in full and ahead of schedule. During a visit to The General’s Kansas City assembly plant, GM CEO and Chairman Ed Whitacre announced that the automaker has made its final payment of $5.8 billion to the U.S. Treasury ($4.7 billion) and Export Development Canada ($C1.1 billion). Whitacre also announced that GM will invest $257 million in its Fairfax, Kansas and Detroit Hamtramck assembly centers.
GM originally had until 2015 to finish paying off the loans, but earlier this year, Mr. Whitacre said that it would finish paying them off by June. By paying off the loans today, GM has beaten all loan-related estimates and deadlines. It has also paid interest on the money. In December, GM made payments of $1 billion to the U.S. and $200 million to Canada.
The move will certainly build confidence in The General, an important feat given GM’s goals of becoming an independent public company again. However, these repayments do not affect the equity stakes held by the United States and Canadian governments in General Motors, as most of the $50 billion that GM borrowed from Washington as it headed into bankruptcy was converted to an equity stake. Currently, the U.S. Treasury owns 61 percent of GM while another 10 percent is held by Canada.
Most recently, GM CFO Chris Liddell expressed his belief that the New GM can earn an operating profit in 2010 after losing $4.3 billion in the second half of 2009. The 2009 loss was related to a UAW retiree medical plan settlement as well as a foreign currency re-measurement loss.
The GM Authority Take
The videos (available after the jump) should give you an idea of the levels of excitement at the New GM. But this is just the beginning, as we’ve not yet seen what the New GM is capable of doing. Too ambiguous? Let’s break it down.
The New GM hasn’t had nearly enough time to wake up and show us what it’s really capable of. If you think the Cruze, LaCrosse, Malibu, SRX, Equinox, Terrain and Camaro are selling well, we simply can’t wait for the next-generation CTS, Malibu, Aveo, and forthcoming ATS, and XTS.
Click past the break for the full press release and the aforementioned videos.