GM says it has repaid part of its US and Canadian government loans

DETROIT — General Motors Co. made the first payment on its giant instalment loans from the U.S. and Canadian governments on Friday, sending US$1 billion to the U.S. Treasury and $192 million to Canada.

DETROIT — General Motors Co. made the first payment on its giant instalment loans from the U.S. and Canadian governments on Friday, sending US$1 billion to the U.S. Treasury and $192 million to Canada.

The company plans to repay both governments in full by the end of June, but chairman and acting CEO Ed Whitacre Jr. said in a statement that repayment is contingent on no downturns in the economy or GM’s business.

GM owes the U.S. government a total of $52 billion, with $6.7 billion of that in loans. At least part of the remaining $45.3 billion could be repaid when GM sells stock, perhaps late next year. The U.S. government currently owns about 61 per cent of the troubled Detroit automaker in exchange for putting up money that is keeping the company afloat. GM also owes $1.4 billion in loans to the Canadian and Ontario governments.

Whitacre on Tuesday committed to repaying the loans by the end of June. His predecessor as CEO, Fritz Henderson, announced in November plans to start making eight quarterly payments in December.

GM posted a $1.2-billion loss for the third quarter, but said it was generating cash and it felt comfortable committing to the repayment. Ray Young, chief financial officer at the time, said the government placed $16.4 billion of GM’s money into a contingency fund in case sales worsened or other problems cropped up. Now, GM doesn’t need the contingency money and can repay a portion to the government, he said.

Whitacre said the repayments would come from a combination of government dollars and cash generated by the company. On Tuesday, he said he didn’t know how much money a public stock offering would bring.

GM said its earnings show a company making progress, riding dramatically reduced structural costs to a far better performance than the $6 billion loss GM reported in the first quarter.

GM took in $3.3 billion more cash than it spent for the third quarter, far better than the $10 billion the company burned through during the first quarter.

A spokeswoman for the U.S. Treasury Department would not comment other than to confirm receipt of the payment.

Just Posted

WATCH: Central Albertans learn about farm life at Sunnybrook Farm Museum

Pioneer Days Festival in Red Deer Saturday-Sunday

Number of seniors who play bridge in Red Deer growing

Red Deer Bridge Club has been around for close to 60 years

PHOTOS: Buccaneers battle Wolfpack in AFL semifinal

The Central Alberta Buccaneers battled the Calgary Wolfpack in the Alberta Football… Continue reading

Raising awareness for Bikers Against Child Abuse

Second annual Raise A Ruckus Against Child Abuse was held at the Red Deer Radisson Hotel Saturday

Central Alberta Yogathon cancelled Saturday

Due to air quality concerns the fourth annual event will take place Sept. 15

VIDEO: Central Albertans learn about Icelandic poet at Stephansson House

Harvest Fair and Quilt Show hosted at Stephansson House in Spruce View Sunday

Trump says his White House counsel not a ‘RAT’ like Nixon’s

BRIDGEWATER, N.J. — President Donald Trump insisted Sunday that his White House… Continue reading

Wildfire moves closer to Glacier National Park’s scenic road

MISSOULA, Mont. — A wildfire in Montana’s Glacier National Park is forcing… Continue reading

Prime Minister Trudeau, Premier Couillard march in Montreal’s Pride parade

MONTREAL — Thousands of cheering spectators lined the streets of Montreal on… Continue reading

All eyes on Andrew Scheer as Conservative convention set for Halifax

OTTAWA — After a week of internal caucus squabbles, Conservative Leader Andrew… Continue reading

Canadians fear for relatives trapped amid flooding in Indian state of Kerala

In the wake of deadly flooding in the Indian state of Kerala,… Continue reading

Indonesia’s Lombok island jolted by multiple quakes

SEMBALUN, Indonesia — Strong earthquakes jolted the Indonesian tourist island of Lombok… Continue reading

Afghan president calls for Eid cease-fire, Taliban to reply

KABUL — Afghan President Ashraf Ghani has called for a conditional cease-fire… Continue reading

Montreal may have less influence after October provincial election

MONTREAL — When Coalition Avenir Quebec Leader Francois Legault recently dismissed the… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month