General Motors had promised to pay back its $8.4 billion in government loans from the U.S. and Canada by June, but what do you know, it's April, and GM is all ready to pay in full.
As we pointed out before, though, GM is paying back the loans with money donated by taxpayers -- in other words, simply giving back the money it took last year -- and the U.S. government's investment in the automaker remains substantial. (This interview with David Shephard from last fall explains the arrangement in more detail.)
Moving on, though, Ed Whitacre, company chairman and CEO, also announced today that the automaker will invest $257 million in the redesigned 2012 Chevrolet Malibu. The largest portion, $136 million, will go to GM's Fairfax, Kansas, assembly plant, which will build the sedan.
Another $100 million will go to Detroit's Hamtramck plant, which will assemble the new Malibu in periods of peak demand -- of which GM hopes there will be many.
1487 says:
09:14 AM, 04/21/10
I think the point is the repayments are ahead of schedule and they are moving quickly towards an IPO. every TARP recipient that has paid back anything was simply repaying loans with taxpayer money. GM is no different. Every bank or automaker was given what the government thought was required to remain solvent and functional. As conditions improved money was paid back early in several cases. I'm pretty sure GM is doing better than AIG on the repayment front. Taxpayers have a much better chance at getting their $50B back from GM than their $180B back from AIG.
half_ton says:
09:52 AM, 04/21/10
@1487
Agree 100%. A sucessful GM is good for eveyone; love or hate their vehicles.
alman08 says:
10:07 AM, 04/21/10
... "As we pointed out before, though, GM is paying back the loans with money donated by taxpayers -- in other words, simply giving back the money it took last year -- and the U.S. government's investment in the automaker remains substantial. (This interview with David Shephard from last fall explains the arrangement in more detail.)"...
at least they're paying back some $.
good news.
throwback says:
10:10 AM, 04/21/10
"....with money donated by taxpayers", that's a kind way of putting it. I would have used less family friendly words.
1487 says:
10:21 AM, 04/21/10
one way all of this could've been avoided is for the US to adopt Japan style rules and basically eliminate all foreign competition. With a government like that on your side bankruptcy is never going to be an issue.
inlinesix says:
10:39 AM, 04/21/10
This is a good thing for many, especially workers with the company. It also means that GM must be reaching more buyers. Here is a US Treasury update on the TARP repayments as of April 2, 2010.
http://www.ustreas.gov/press/releases/tg626.htm
hal9000 says:
11:55 AM, 04/21/10
1487....Don't think it's just a free-for-all when it comes to selling a vehicle in the U.S. and imagine how bad a vehicle like the Chrysler Sebring would be if there were less competitors!
1487 says:
12:18 PM, 04/21/10
hal:
Give me a break. If you're logic was correct Japanese cars would be crap because there is little outside competition iN Japan. automakers respond to competition PERIOD- it doesn't have to be foreign competition specifically. It cracks me up with Japanese brand worshippers claim that we only have innovation in the US market because Toyota and HOnda showed up. What do you think was going on in the 50s and 60s when American car companies were constantly developing new styling themes and technologies? How was any of that possible before we were "saved" by the innovations of Toyota and Honda in the 70s?
1487 says:
12:21 PM, 04/21/10
"Don't think it's just a free-for-all when it comes to selling a vehicle in the U.S."
what restrictions do we have on foreign competition here? Do tell. This is the most open market for vehicles in the world. Japan and S. Korea are probably the most closed auto markets in the world. If Japanese cars are so infallable I would like to know why they try to limit competition at home. The real reason is JOBS, they believe that the auto industry is about jobs as much as anything else and they dont want to lose jobs by allowing rampant importation of cars from abroad. Total opposite of US policy.
xorbe says:
03:09 PM, 04/21/10
GM paid back $8.4b and still owes another $53.4b -- it's only 13% of THAT particular debt!
inlinesix says:
03:12 PM, 04/21/10
"GM paid back $8.4b and still owes another $53.4b -- it's only 13% of THAT particular debt!"
Yeah they better put out some pretty damn good cars for a long time.
lions208487 says:
04:14 PM, 04/21/10
Looks like I see a little G8 in the DNA of the Malibu... Fantastic!! I look forward to test driving one during my lunch break.
subytrojan says:
05:52 PM, 04/21/10
Couldn't this be considered a restriction on foreign competition?
http://en.wikipedia.org/wiki/Chicken_tax
smilez says:
08:58 PM, 04/21/10
"one way all of this could've been avoided is for the US to adopt Japan style rules and basically eliminate all foreign competition. With a government like that on your side bankruptcy is never going to be an issue. "
I feel like I'm missing something in that statement. Are you saying that the U.S. should only sell the Big 3? Or am I misreading it?
1487 says:
09:47 AM, 04/22/10
Actually the us stake in the company is about $45bil at this point, not $53b as previously stated.
notabigdeal says:
10:50 AM, 04/22/10
Anyone excited to see the new Malibu? It is a tough segment.