How Much Money Does Gm Still Owe The Government
General Motors Pays Back $8 Billion to Taxpayers Ahead of Schedule
But how much TARP coin has yet to exist returned?
April 21, 2010— -- General Motors today $8.ane billion in government loans repaid, five years alee of schedule and nine months subsequently the troubled auto giant alleged bankruptcy, signaling that the auto maker may exist on the path to profitability.
"As of today, GM has repaid in full and interest," said GM CEO Ed Whitacre to a crowd assembled on floor of a GM plant in Kansas City, Kan.
To smiles and applause from workers, Whitacre also announced GM's programme to invest $257 million in that plant and another in Detroit to ramp upwards production of the Chevy Malibu.
Cheering on the floor of a GM factory would accept been unthinkable a twelvemonth agone, when the company was on a downward spiral towards its bankruptcy in June 2009.
When it emerged from restructuring last year, GM had converted about of the $52 billion in federal bailout funds into visitor stock, leaving a $6.seven billion outstanding loan from the U.S. Treasury. The Canadian government lent the visitor an additional $ane.4 billion.
Benefits of Bankruptcy
With buying of 61 percent of GM'due south shares, American taxpayers still take billions invested in the motorcar maker, just analysts say there'south reason to believe that investment could at present pay off. If the government can sell its stake in GM for more than than $45 billion, then taxpayers could actually make a turn a profit.
"Information technology would look awfully good if the Democrats could say, 'We saved a bunch of jobs, we got a successful company, and they taxpayers got paid dorsum,'" said John Wolkonowicz, a senior analyst at HIS Global Insight. "That would exist huge."
Bankruptcy offered GM a take a chance to shed unprofitable product lines and expensive legacy costs, including large spousal relationship pensions. Along with a management shakeup that came with the bailout, a line of well-reviewed vehicles is at present catching on with the public.
"Full general Motors has undergone a revolution in top management," said Micheline Maynard, an auto writer for the New York Times. "Considering they don't have loyalties to the past, they tin get in with fresh ideas."
Although GM still lost $3.4 billion in the quaternary quarter of 2009, analysts expect that the company will first turning a turn a profit this twelvemonth and could follow with a public offering of GM stock.
Administration Officials Praise Turnaround
The Obama administration was already taking credit for the bailout's success today, noting in a report that the turnaround of GM and Chrysler saved an estimated 1 one thousand thousand jobs from elimination last year.
"This turnaround wasn't an blow of history," wrote White House economic adviser Larry Summers on the White House Web folio. "It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler -- and indeed the automobile manufacture -- a lifeline."
Treasury Secretary Tim Geithner echoed Summers, saying in a statement: "This continued progress is a positive sign for our auto investment -- non merely more than funds recovered for the taxpayer but also countless jobs saved and the successful stabilization of a vital manufacture for our country."
Billions in Bailout Funds Still Owed to Taxpayers
Despite the billions paid dorsum by GM today, there are billions more bailout dollars still outstanding.
Of the $14 billion given to Chrysler, just $one.8 billion has been returned. Economists say that Chrysler was in a deeper hole than GM, just there's still a run a risk that taxpayers will get their money back.
And then, of course, there are the banks.
Taxpayers spent $205 billion to save the banks, and $136 billion has already been paid back. That leaves a $67 billion IOU from Wall Street to the federal government.
Citigroup, which received $45 billion, is the only major banking concern that has all the same to pay back all of its TARP loan. Citi has and then far repaid $twenty billion and still owes another $25 billion.
Economist Marker Zandi of Moody's Economy.com said taxpayers will get their coin back from the banks, but information technology volition take fourth dimension.
"I think a year from now, certainly two years from now, everyone will have paid united states of america back what they owed the states," Zandi said.
Every bit for insurance giant AIG, which received $seventy billion direct? Tax payers are still waiting for that money to be returned.
The Associated Press and Reuters contributed to this report.
Source: https://abcnews.go.com/WN/general-motors-repays-81-billion-government-loans/story?id=10437944
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