General Motors Co. has repaid $8.1
billion in loans it got from the U.S. and Canadian governments, a move its CEO
says is a sign the automaker is on the road to recovery.
CEO Ed Whitacre announced the
repayments at GM’s Fairfax Assembly Plant in Kansas City, Kan., where he said
GM is investing $257 million in that factory and the Detroit-Hamtramck plant.
The White House pointed to GM’s repayment of the loan and Chrysler LLC’s
posting of an operating profit in the first quarter of 2010 as concrete signs
that the bailout of the U.S. automakers was working.
In a report, the Obama
administration noted the American auto industry lost more than 400,000 jobs in
2008 and analysts estimated another 1 million would have been lost had GM and
Chrysler been liquidated. In the past nine months, the White House said
automakers have added 45,000 jobs, the industry’s strongest job growth in
nearly a decade.
“This turnaround wasn’t an
accident of history,” White House economic adviser Larry Summers said in a
GM got a total of $52 billion from
the U.S. government and $9.5 billion from the Canadian and Ontario governments
as it went through bankruptcy protection last year. At first the entire amount
of U.S. aid was considered a loan as the government tried to keep GM from going
under and pulling the fragile economy into a depression.
But during bankruptcy, the U.S.
government reduced the loan portion to $6.7 billion and converted the rest to
company stock, while the Canadian government held $1.4 billion in loans. Those
loans were repaid Tuesday, five years ahead of schedule.
The automaker hopes to begin
repaying the remaining $45.3 billion to the U.S. government and $8.1 billion to
Canada via a public stock offering, perhaps later this year. The U.S.
government now owns 61 per cent of the company and Canada owns roughly 12 per cent.