General Motors pays back US Treasury
It was recently announced that General Motors has paid the U.S. Treasury back on a portion of the loans it received in the auto bailout. General Motors entered Chapter 11 bankruptcy protection, then set about getting back on track. It paid off portions of the loans with interest far ahead of schedule, so apparently they are doing well enough to pay back the overnight loans they got from Capitol Hill.
General Motors makes $6 billion payment
General Motors wired the final payment Tuesday night on $6.8 billion in installment loans from U.S. and Canadian governments. More than $1 billion went to the Canadian government, and $4.7 billion went to the U.S. Treasury. According to Reuters, the U.S. Treasury has confirmed that General Motors has paid its loan obligation a full five years before the maturity date of the loan. The loans made to General Motors and Chrysler were part of the TARP program.
General Motors to begin mass production of Chevy Volt
Production has already commenced on the Chevy Volt, the plug in hybrid. It is being manufactured at the Hamtramck plant near Detroit. General Motors Chief Executive Ed Whitacre has also, according to CNN, announced they will invest $136 million into the Fairfax, Kansas and $121 million into the Hamtramck, Michigan plants for production of the next generation Malibu. The Fairfax plant also produces the Buick LeSabre, and the Hamtramck plant produces the Buick LaCerne and Cadillac DTS models, among others.
Not out of the woods just yet
The U.S. and Canadian governments are still majority shareholders of General Motors. Currently, according to this article in The Guardian, the US and Canadian governments collectively hold 73 percent of GM stock, the U.S. holding 60 percent. General Motors received about $50 billion from the U.S. Treasury in TARP funds, and the plan is that once GM is allowed to go public for stock purchases again, the taxpayers will get back something on their investment. Chrysler is still struggling, though it has begun to make positive steps. The Wall Street Journal reports that Treasury Secretary Tim Geithner will be meeting with Whitacre soon.
So is it ok to buy GM again?
Many people were dissatisfied with the involvement of the Treasury, and also the fact that one of the largest manufacturers of domestic automobiles slipped so badly. The car manufacturing industry is also one of the largest employers in the US, and thousands were laid off in the wake of the General Motors and Chrysler bankruptcy. This is proof that GM is returning to not only solvency, but perhaps to profitability, and with the upcoming release of the Chevy Volt, Detroit may soon see the dawning of a new day.
(Photo Credit: http://www.flickr.com/photos/jm3/ / CC BY-SA 2.0)