General Motors on Nov. 16 announced a loss of $1.15 billion since emerging from bankruptcy in July, but said it would step up repayments of bailout aid to the U.S. and Canadian governments. The number one U.S. automaker said it would accelerate the repayments "in light of improving global economic conditions, stabilizing industry sales and its healthier cash position."
GM owes $6.7 billion to the U.S. Treasury and $1.4 billion to Canada for aid from the governments to help the company emerge from bankruptcy as a new entity.
"GM plans to repay the U.S., Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial $1.2 billion payment to be made in December followed by quarterly payments," the company said.
The automaker said it has begun repaying German state aid for its Opel division and will pay off the remaining $600 million by the end of the month.
GM said it expects "negative net cash flows in the fourth quarter of 2009" due to repayments of government aid and a payment of $2.8 billion to help its former parts unit Delphi emerge from bankruptcy. But in 2010, the company expects "modest growth" in the global automobile market including the U.S., which will help its financial position.
"We have significantly more work to do, but today's results provide evidence of the solid foundation we're building for the new GM," chief executive Fritz Henderson said. "With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance. We'll achieve that by winning customers over, one at a time, with vehicles that deliver performance and value."
Copyright Agence France-Presse, 2009