The company said it would begin paying back $6.7 billion in debt to the government in billion-dollar quarterly installments, starting in December. The pace would allow the carmaker to finish repaying its loans four years earlier than expected.
GM borrowed nearly $50 billion from the federal government over the past year. Of that, $6.7 billion remains on the restructured company’s balance sheet in the form of loans; the rest was converted to stock held by the Treasury Department.
“Today’s release of General Motors’ financial results is further proof that President Obama’s economic experiments are wrong for America,” Republican National Committee Chairman Michael Steele said in a statement. “Sadly, GM has not only failed to turn a profit since the president poured $50 billion of the taxpayers’ dollars into GM’s bankruptcy restructuring, but it has actually lost $1.2 billion.”
Democrats emphasized the positive elements of the GM announcement and accused Republicans of wanting the company and the nation to fail.
“Republicans will politicize anything — even good news — and have no problem cheering against America,” said Brad Woodhouse, communications director for the Democratic National Committee (DNC), in an e-mail to reporters.
“This morning, GM announced that they are making progress in turning an iconic and vital American company around — and that they would repay government loans four years early — something even the most cynical of the president’s political opponents could cheer — unless you’re Michael Steele and the Republican Party,” he added.
GM’s own top official steered clear of politics, however, emphasizing only that his company expects to have to do more to turn its fortunes around.
“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.”
GM emerged from bankruptcy and restructuring in July and posted a loss of $1.15 billion between July 10 and Sept. 30, when the quarter ended.
The company boasted an improved cash flow and improved year-over-year sales.
In a related development, Alvaro de Molina resigned Monday as chief executive of GMAC FinancialServices, GM’s financial arm, at the request of its board of directors, according to a report in The Wall Street Journal.
Adding to the political dimension of the bailouts are Chrysler’s outstanding debts to the U.S., for which there is no clear timetable as of yet for repayment.
Sen. John McCainJohn McCainSenate committee to vote Monday on Tillerson Trump fails to mention Clinton in inaugural address Hillary Clinton under microscope at inauguration MORE (R-Ariz.), who opposed the bailouts for the automakers, suggested this past weekend that he doesn’t expect Chrysler, which partnered with Italian automaker Fiat during its government-backed restructuring, to survive.
“It was all about the unions,” McCain said during remarks in Phoenix, where he served Sunday as the grand marshal of a NASCAR race.
“The unions didn’t want to have their very generous contracts renegotiated, so we put $80 billion into both General Motors and Chrysler, and anybody [who] believes that Chrysler is going to survive, I’d like to meet them,” the Arizona senator added, as reported by The Detroit News.
Steele on Monday seized on the unpopularity of the auto bailouts, which polled poorly at the time of their installation, to blast other aspects of the Democratic agenda, including the push to overhaul healthcare with a government-run insurance program.