Eighth Wonder of the World: GM Withdraws Federal Loan Application
In a move that was nearly impossible to predict, given the car maker's appetite for federal money in 2009 and even in 2010, GM announced today that it has had it. More precisely, it has enough money now not to ask for more.
In October 2009, GM had submitted a loan application with the Department of Energy, asking the US for a measly $14.4 billion, to be used for the retooling of its US factories “to make vehicles and components that improve fuel economy.”
Just to give you an idea on how much money GM made since filing the application in October 2009 (mostly thanks to the largest initial public offering in history, made last year), the manufacturer now says it no longer needs the $14.4 billion.
“This decision is based on our confidence in GM’s overall progress and strong, global business performance,” said Chris Liddell, GM vice chairman and chief financial officer. “Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet.”
Some of you might wonder if withdrawing the loan application is a good or a bad thing. Well, judge for yourselves. GM was asking in 2009 for $14.4 billion out of a total of $25 billion in direct DOE loans approved by the US for ALL companies in need of cash. That's more than half of the total amount...