GM to repay billions in federal loans before deadline
GM to repay billions before federal deadline
General Motors is expected to announce Wednesday that it will pay off $5.8 billion in government loans ahead of the June deadline, according to sources familiar with the plans.
The Detroit automaker will repay $4.7 billion to the U.S. Treasury and $1.1 billion to the Canadian government. It has already repaid $2.3 billion on both loans.
The company is describing the early repayment as a sign of its rebound. Earlier this month, GM announced that it had lost $4.3 billion during the second half of 2009, but the automaker said it could turn a profit this year. Supporters seized on the news to bolster their case in favor of the government bailout of the company.
"Today's news shows that supporting our auto industry and the millions of families whose jobs depend on it was the right thing to do," said Rep. Gary Peters (D-Mich.).
It will probably take years, however, before the government can get back the $50 billion it has put into GM. Even after the loans are repaid, the Treasury will continue to own about 60 percent of the automaker. The United States cannot sell its equity stake until the company has an initial public offering of stock.
-- Peter Whoriskey
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-- From news services and staff reports