According to Autonews, citing the inside sources, the official announcement will be made by Whitacre on Wednesday, when he will be at GM's Fairfax assembly plant. Whitacre, who has been named permanent CEO of General Motors after Fritz Henderson resigned, initially planned on repaying the loans by June, some five years ahead of schedule.
“It's a big step,” Mirko Mikelic, senior portfolio manager at Fifth Third Asset Management told the source. “I don't think it's the be-all, end-all of their turnaround. But it's a step forward, and you can't deny that they're in better shape if they're able to repay that debt.”
The news is not as surprising as it is confusing. 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. And yet, at the end of 2009, GM was sitting on a $36.2 billion reserve, which may indicate GM will use the same money received from the two governments to repay the loans.
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.
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