GM Starts Paying Back
April 21, 2010
Chairman Ed Whitacre announces that GM has repaid $5.8 million in loans from the U.S. Government. The announcement draws some applause but also provokes a backlash from critics who point out GM actually got $49.9 billion from the U.S. Treasury while only $6.2 million was in direct loans subject to repayment in cash. GM's finances are still under pressure from its $4.3 billion losses in the fourth quarter of 2009 and pension liabilities totaling $25 billion. An IPO of shares in the new GM could help repay part of the $44 billion the U.S. still has sunk in the automaker but the Government Accounting Office notes that GM's market capitalization would have to exceed historical levels for the government to recoup all of its money; even the U.S. Treasury Department acknowledges that it doesn't expect to be repaid in full by GM or Chrysler.