General Motors Co. has announced plans to begin repaying the government ahead of schedule after generating $3.3 billion in cash for the third quarter. $42.6 billion was available in cash at the end of September after a restructuring, developed by the Obama administration, required that GM begin cutting jobs and eliminating dealerships to minimize losses.
GM admitted a loss of $1.15 billion since exiting Chapter 11 bankruptcy in July. This information, revealed Monday, is the most insight we have had into the financial evolution of GM since he government appointment Chairman Ed Whitaker to take GM into the future.
Mr. Whitacre has made it clear the company intends to return the $6.7 billion in debt it owes U.S. taxpayers as proof of their progress. "Right now we're focused on paying back the debt portion,” he said.
Whitaker has been criticized for his optimism by the Obama auto task force before and his current projections for 2011 and repayment are under fire as well. The company believes vehicle sales will reach up to 11.5 million despite a 10.2 percent unemployment rate and continually falling auto demands.
GM would need to hit a market value of $68 billion, over $10 billion more than its peak in 2000, in order to reimburse the government in full, according the Congressional Oversight Panel.
Henderson has declared GM will begin the repayment in December with an initial payment of $1.2 billion.
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