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Drew Dowdell

GM make $1b payment to US Treasury today

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GM make $1b payment to US Treasury today

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Ed Whitacre announced today that GM has made a $1b payment to the US treasury and $192m to Export Development Canada. Mr. Whitacre further stated that GM will be continuing payments through June 2010 when the loans are expected to be paid in full baring any further economic or business downturn.

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The interesting thing is all those negative-nannies out there bitching that the government shouldn't have given the money to the automobile companies in the first place will never even know, or care that any amount is ever paid back.

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I want to know if the goverment will return the inkind share of GM it holds with each payment?

Or will they wait till GM pays it all back and who ever is in charge at that time refuses to give it all back?

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GM'S Whitacre reports first payments to U.S., Canada

AUTOMOTIVE NEWS

DECEMBER 18, 2009 - 4:08 PM ET

DETROIT (Reuters) - - General Motors Co. CEO Ed Whitacre said GM has paid $1 billion to the U.S. Treasury and $192 million to the governments of Canada and the province of Ontario.

This is the first regular payment for GM of the $8 billion of bailout debt that the company says it will have paid off in June.

Whitacre on Tuesday said that automaker would repay its government loans by June, the first time a GM official had set that short of time to settle the debt.

"We are grateful for the support the governments have provided us. We look forward to continuing repayments through June 2010, at which time the balances will be paid in full, assuming no downturn in the economy or business," Whitacre said in a statement.

GM said last month that it would repay the government loans back from a $13 billion escrow account containing cash left over from the government bankruptcy financing that established a new company in June.

GM emerged from bankruptcy on July 10, when Whitacre officially became chairman. He took over for ousted CEO Fritz Henderson on Dec. 1.

Next June, should GM keep to its scheduled payments -- and Whitacre said today that it would -- it will have cut its current debt in half.

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The interesting thing is all those negative-nannies out there bitching that the government shouldn't have given the money to the automobile companies in the first place will never even know, or care that any amount is ever paid back.

I'm pretty sure this is just PR for the benefit of people who don't have time to understand the details.

"GM said last month that it would repay the government loans back from a $13 billion escrow account containing cash left over from the government bankruptcy financing that established a new company in June."

As I understand it, GM is just paying back the government by taking out more debt from the government.

And while I haven't seen the tally sheet lately, that 8 billion is only a small % of the money that was given to them.

If I could draw an analogy:

I wouldn't consider it too responsible of myself if I was taking out a loan to pay my mortgage all while spending thousands more than I was making... just after my grandparents died and left me thousands and I stiffed my parents of all the money I owed them.

Edited by GXT
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Incorrect.

Lets say you took out a home equity loan for $20,000. You spent some of that money, but the rest of it you put in a savings account thinking you'd need it later. Later comes and you realize that you're not going to need all of that money, so you take $1,000 and send it back to the bank as a payment on the home equity line.

That's what GM did.

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