GM to accelerate repayment of bailout

The new General Motors will accelerate its repayment of bailout funds to the U.S. government, the automaker announced on Monday morning.

The company will pay back its outstanding $6.7 billion in debt to the government in quarterly installments, allowing it to finish repaying its loans four years earlier than had been required.

GM will begin paying the government $1 billion installments to the Treasury starting in December and begin paying down its obligations to the Canadian government (it had started to repay German loans last week) in a sign that the restructured automaker may be moving back on the path toward viability.

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"We have significantly more work to do, but today’s results provide evidence of the solid foundation we’re building for the new GM," CEO Fritz Henderson said in a statement. "With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance."

The company still holds $17 billion in debt, though, and the U.S. will remain an active partner in the company going forward after investing almost $50 billion in the troubled automaker. Many of those funds were converted into equity in GM for the government, and the federal government maintains a 61 percent majority stake in the company.


Still, GM posted a net loss of $1 billion in the period between July 10, when it emerged from bankruptcy and restructuring, and Sept. 30. The company did see year-over-year sales increase by 4.7 percent, however, no doubt in part due to the government's popular "Cash for Clunkers" program.