GM repays bailout money

[unixronin]

Well, well.  Turns out GM repaid $8.1 billion in bailout loans today, five years ahead of schedule.  This is the final installment of its $61.5bn bailout — $52bn from the US and $9.5bn from Canada — because $53.4bn of the bailout loan was effectively repaid in stock, giving the US Government a 61% holding in GM.

This doesn't mean GM is out of the woods; after wiping out roughly $83bn of its $95bn debt in its June 2009 bankruptcy, it lost a further $3.4 billion in 4Q2009 alone, ending the year $15.8bn in debt.  (Here's an interesting question:  If the government is the majority shareholder, who gets to deduct the business loss?  I don't want to fill out that 1040.¹)

GM says it has "developed a cost structure that allows us to be competitive", but time will tell whether it can operate at a profit again, and whether it can build cars — at a profit — that people want to buy.

[1]  Yes, I know corporations don't file 1040s, they use a different set of forms.  Work with me a little here.  :)

Comments

[perspicuity.livejournal.com]

watch the feds "manage" GM into the ground...

but hey, good example of a company paying back debts.

the feds could learn a lesson there.

#

[lebo-superman.livejournal.com]

"the feds could learn a lesson there."

but I'd bet money they won't.

[lwj2.livejournal.com]

GM's management beat them to it, I think.

GM -- and other vehicle manufacturers -- will have to develop reliable, affordable cars for people, i.e., not something that costs a third of what a house does; they'll also have to get away from the idea that a Suburban is a family vehicle.

Granted I own one, I also use it to haul stuff and with fuel prices, it sits parked for the most part.

I had a Chevy wagon purchased new in 1986 that's now on it's second owners, still doing fairly well. THAT was what we used to haul family around in.