Breaking: General Motors Will Begin to Repay Government's $6.7 Billion Loan
In a surprising move, General Motors has announced that it will begin to pay back $6.7 billion in loans to the U.S. and Canadian governments, starting as early as December. GM wasn't required (or expected) to begin paying back the loan until 2015.
The news comes as GM releases its third quarter results with a loss of $1.15 billion. That number isn't good but is significantly less than the losses the automaker has been reporting as of late.
"It's a lot better than what we had expected," said company CEO Fritz Henderson in a conference call. "Nonetheless, it's a loss, and you cannot be satisfied with it."
Henderson also released a statement in which he said that, "We have significantly more work to do, but today's results provide evidence of the solid foundation we're building for the new GM."
The news comes after General Motors announced its October sales, with the auto-giant posting its first sales gain in 21 months.
The repayment process will begin with a $1 billion payment to the U.S. treasury in December, with a $192 million payment to the Canadian government. The $6.7 billion loan, is however, a small portion of what GM borrowed from the U.S government, with $50 billion in total coming from the taxpayers. The majority of that amount was given in exchange for the Treasury's 61 percent ownership of the automaker. The treasury has said it will begin selling shares in GM once the 6.7 billion loan is reduced to $3 billion.
"I've been asked since we went into the bankruptcy, probably a hundred times, 'When are you going to start paying back the taxpayer?' The answer," said Henderson, "is now."
More: Breaking: General Motors Will Begin to Repay Government's $6.7 Billion Loan on AutoGuide.com
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