GM to Start Repaying Government Loan Next Month

In a surprising but welcome turn, GM will begin repaying its debt to the U.S. government next month, which is years ahead of schedule.

Despite posting a $1.15 billion third-quarter loss, the automaker has performed better than expected after cutting costs and moving through bankruptcy faster than expected. It plans to pay $1 billion per quarter until it repays a $6.7 billion loan, according to the Washington Post.

Keep in mind that the $6.7 billion is only the debt owned by the U.S. The eventual return to taxpayers on their $50 billion investment -- representing a 61% stake in the company -- will be determined by GM’s eventual stock value.

The $6.7 billion debt was not due to be repaid until July 2015, and the move to repay the tab early indicates that GM is “performing modestly above expectations,” according to the Post.

This news comes on the heels of GM repaying Germany 200 million euros ($297.6 million) in loans that sustained Opel, its European arm, through the downturn.

GM to Start Repaying Debt to U.S. Government Next Month (Washington Post)

Comments

Surprising but great news.

Meh, they are just grasping at the PR straws here. They are only giving back what wasn't used to fund their bailout and the amount is less than 10%.

The market will never be strong enough for GM to actually make a profit to pay back the full loan.

Yoing has the PR angle right from GM; if they make enough to pay back their board (aka The Obama Administration)it is sucked out for union or government favors as a giveaway to some of their cronies. Tell me I'm wrong, sure.