GM Repays TARP Loans, Announces $257-Million Plant Upgrade Plan
True to his word, General Motors Company Chairman and CEO Ed Whitacre announced that the automaker has completed repayment of the remaining $5.8 billion in Troubled Asset Relief Program (TARP) and Canadian Export Development loans in full -- and well in advance of when they were due. The early payback, not mandated until 2015, reflects solid progress on GM's road to overall recovery after it emerged from a structured bankruptcy in July 2009.
"GM's ability to pay back the loans ahead of schedule is a sign that our plan is working, and that we are on the right track. It is also an important first step toward allowing our stockholders to reduce their equity investments in GM," said Whitacre. Currently, the U.S. government owns some 61 percent of the "new" GM's outstanding stock, which was created as part of the original $50 billion restructuring that saw it transition from General Motors Corporation to General Motors Company.
"We still have much hard work ahead of us, but we are making progress toward our vision of designing, building, and selling the world's best vehicles. He further confirmed GM's sales of its remaining Buick, Cadillac, Chevrolet and GMC divisions were up 36 percent in the first quarter of 2010 compared to last year. Those optmistic sentiments were echoed in a statement by Treasury Secretary Timothy Geithner, who noted: "We are encouraged that GM has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability. This continued progress is a positive sign for our auto investment -- not only more funds recovered for the taxpayer but also countless jobs saved and the successful stabilization of a vital industry for out country."
$257 Million for Malibu-Related Plant Enhancements
In addition to confirming the loan payoffs, Whitacre also announced that GM would be investing $257 million to upgrade two existing facilities that it sees a being particularly critical to its future success. The Fairfax, Kansas, assembly plant which produces the Chevy Malibu and Buick LaCrosse and is slated to become the primary source of the next-generation Malibu will receive $136 million in enhancements dedicated to the Chevy product. Closer to its home, GM's Detroit Hamtramck plant, which currently builds the Buick Lucerne and Cadillac DTS, will get $121 million in new money dedicated to facilities, machinery, equipment and new tooling focused on have it serve as a second Malibu sourcing point. Hamtramck also is the nascent home of the Chevy Volt has just begun producing the first pre-production models of that vehicle prior to the first customer cars going on sale late this year.