Although the automaker has been moving towards repaying its outstanding debt to the U.S. and Canadian governments by June 2010, new reports suggest General Motors may repay the last of its federal loans by the end of the week.
A brash of new reports suggest the automaker will reveal tomorrow that it will repay the remainder of its debt — approximately $5.8 billion — by the end of the week. GM has yet to confirm such an announcement, but Chairman and CEO Ed Whitacre will be holding a press conference tomorrow afternoon at GM’s assembly plant in Fairfax, Kansas. Whitacre will announce an additional investment in the facility (which builds the Chevrolet Malibu and Buick LaCrosse) and could also reveal the automaker’s latest debt payment plan.
If true, GM is well ahead of schedule to repay the loans. Former CEO Fritz Henderson had lobbied to draw out the repayment, ensuring GM had a reasonable amount of operating liquidity at hand. Whitacre, on the other hand, pushed to settle the debts as soon as possible. After assuming the position of CEO in December, Whitacre proclaimed GM would repay all government loans by June 2010.
GM made its first payments that month, when it paid the U.S. Treasury nearly $1 billion and sent $192 million to the Canadian government. Identical payments were issued again in March 2010. As a result, the automaker owes the U.S. $4.7 billion, and the Canadian government $1 billion. Even after the debt is repaid, the United States will still have a 61-percent stake in the automaker, which will be gradually sold off once GM issues its initial public offering.
GM’s conference in Fairfax is will begin at 10 a.m. EST (7 a.m. PST) tomorrow. Stay with Automobile Magazine for the latest news from the event.
Source: Automotive News (Subscription required)