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Monday, November 16, 2009

GM's Repayment Plan

In today's news, GM is going to begin repaying its government loan.

Sort of.

Most of GM's government debt, which came from the TARP, was converted to ownership in the New GM. So the government loans that GM is going to start repaying are only $6.7 Billion out of about $50 Billion it received in total.

GM is sitting on a cash pile of $42.6 Billion, according to the news story. That cash is essentially all bailout money, as GM is not yet generating net profit. So GM is going to use bailout money to pay off a bailout loan. Then, when the New GM sells stock, we the taxpayers will hopefully gain back some of the rest.

Hope. The watchword of the Obama administration.


stephen said...

I think it is still a long way for them to pay back

Anonymous said...

GM will go under before they pay the people back. When a company will sell the Volt at a loss for a minimum of 5 years, you know there is trouble. How can they pay anything back when they are excited to lose $5-10k per Volt?

It is the new business model, sell cars at a loss knowing we are too big to fail... the government will just print more money...