"Our ability to pay back these loans less than a year after emerging from bankruptcy is a sign that our plan for building a new GM is working," the CEO says. "It is also an important step toward eventually reducing the amount of equity the governments of the U.S., Canada and Ontario hold in our company."
Last year, GM received $52 billion from the US government to survive the bankruptcy process. Out of that amount, $45.3 billion was converted into equity as the government got 61 percent of the car manufacturer.
For the last quarter of 2009, the revived GM announced a $4.3 billion net loss, a global revenue of $57.5 billion and net cash coming from operating activities of $1 billion. At the end of 2009, GM was sitting on a $36.2 billion reserve.
Initially, GM announced it will repay the entire loan to both governments by June, still some five years ahead of schedule. The announcement made yesterday by Ed Whitacre is a sign, he believes, GM is a “leaner, stronger” company and the plan to build a new GM is on the right track.