Thursday, April 8, 2010

GM expects to pay off loans years early

DETROIT — General Motors Co., steadily returning to health after its near-collapse in 2009, said Wednesday it plans to pay off its government loans by June — five years ahead of schedule — and could report a profit as early as this year.
GM said it lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion. But things are on the upswing. Sales and production have increased and GM has gained U.S. market share since the start of the year. The automaker will try to maintain that momentum while facing a stiff challenge from a revitalized Ford Motor Co.

For the period from July 10, when GM emerged from bankruptcy protection after shedding billions in debt, through Dec. 31, GM lost $4.3 billion on revenues of $57.5 billion. But much of that loss was for one-time items, including a $2.6 billion payment to the United Auto Workers union for retiree health care.

The company also reported several indicators of improving health: It took in $1 billion more than it spent in the period and began this year with $36 billion in cash and $60 billion in debt. At the start of 2009, it had $14 billion in cash and $104 billion in debt.

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"General Motors should never again be in the financial position it found itself in last year," GM Chief Financial Officer Chris Liddell said during a conference call with analysts and media.

Repaying $6.7 billion in government loans has been a top priority for CEO Ed Whitacre.

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