General Motors Co (GM) yesterday announced a loss of US$1.2 billion since emerging from bankruptcy in July, but said it would step up repayments to the US and Canadian governments of bailout aid.
The loss, through Sept. 30, is far better than previous quarters and a sign that the auto giant is starting to turn around.
GM chief financial officer Ray Young, however, cautioned that the second and third-quarter figures don’t comply with US accounting standards and shouldn’t be compared with previous earnings.
GM says it is re-valuing its assets and liabilities and should comply with accounting standards next year.
The third quarter loss announcement beat analysts’ expectations. GM said the losses came as revenues totaled US$28 billion in the quarter, US$5 billion more than in the preceding three-month period.
The company said it would begin repaying its government loans next month “in light of improving global economic conditions, stabilizing industry sales and its healthier cash position.”
It owes US$6.7 billion to the US Treasury and US$1.4 billion to Canada for aid to help it emerge as a new entity from bankruptcy.
“GM plans to repay the United States, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial 1.2 billion dollar payment to be made in December followed by quarterly payments,” the company said in a statement releasing preliminary financial results.
GM said it has begun repaying German state aid for its Opel division and will pay off the remaining debt by the end of the month.
“The company has begun to repay the German government loans which were extended to support Opel, and had a balance of 900 million euros [US$1.34 billion]as of September 30, 2009,” the GM statement said.
“Opel has already repaid 500 million euros of that in November, and will repay the remaining 400 million euro balance by the end of the month,” GM said.
The company would be on track to pay off the US$6.7 billion US debt and a US$1.4 billion debt to Canada by the middle of 2011, well ahead of a mid-2015 deadline to repay the two governments.
The government debt represents about 13 percent of the US$52 billion that US taxpayers have invested in GM, the majority of which was exchanged for a 61 percent ownership stake in the company.
Even if GM pays back all its loans early, government investigators have questioned whether taxpayers will recoup their full investment in GM and fellow bailed-out automaker Chrysler Group LLC.
GM, which exited bankruptcy as a new privately held company on July 10, has said it hopes to sell stock to the public late next year so taxpayers can recoup at least part of their remaining investment.
However, a US Government Accountability Office report issued earlier this month said that the automakers’ share values would have to soar to levels they didn’t even approach when they were healthier for the US$80 billion in taxpayer loans to be completely repaid.
The automaker will draw on about US$13 billion that remains deposited in escrow by the government to help make the payments.
GM chairman Ed Whitacre said last week that GM was committed to repaying its government loans.
“Can GM pay back its loans? You bet,” Whitacre said during an address at Texas Lutheran University. “I can’t tell you when, but it won’t be very long.”
He also said the timing of any GM IPO depends on when the firm returns to profitability.
CHINESE PROBE
Meanwhile, a Chinese anti-dumping and subsidy probe into US carmakers that followed a US levy on China-made tires involves US$1.97 billion worth of goods, Chinese Commerce Ministry spokesman Yao Jian (姚堅) said yesterday.
China can impose “provisional measures” against automakers including GM and Ford Motor Co after 60 days from the time the investigation began on Nov. 6, with a final ruling in 12 months, Yao said, without providing specifics.
The announcement shows the scope of the probe that was first revealed on Oct. 29 by Chinese Commerce Minister Chen Deming (陳德銘) during a meeting with US officials. The Obama administration on Sept. 11 levied a 35 percent duty on US$1.8 billion of China-made tires.
China and the US, with US$409 billion of trade between them, have swapped complaints about steel, poultry and tires as calls to protect jobs intensified during the worst economic crisis since the Great Depression.
Also See: Russia suggests THAT Renault take control of Avtovaz
DEFENSE: The first set of three NASAMS that were previously purchased is expected to be delivered by the end of this year and deployed near the capital, sources said Taiwan plans to procure 28 more sets of M-142 High Mobility Artillery Rocket Systems (HIMARS), as well as nine additional sets of National Advanced Surface-to-Air Missile Systems (NASAMS), military sources said yesterday. Taiwan had previously purchased 29 HIMARS launchers from the US and received the first 11 last year. Once the planned purchases are completed and delivered, Taiwan would have 57 sets of HIMARS. The army has also increased the number of MGM-140 Army Tactical Missile Systems (ATACMS) purchased from 64 to 84, the sources added. Each HIMARS launch pod can carry six Guided Multiple Launch Rocket Systems, capable of
Tropical Storm Podul strengthened into a typhoon at 8pm yesterday, the Central Weather Administration (CWA) said, with a sea warning to be issued late last night or early this morning. As of 8pm, the typhoon was 1,020km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, moving west at 23kph. The storm carried maximum sustained winds of 119kph and gusts reaching 155kph, the CWA said. Based on the tropical storm’s trajectory, a land warning could be issued any time from midday today, it added. CWA forecaster Chang Chun-yao (張竣堯) said Podul is a fast-moving storm that is forecast to bring its heaviest rainfall and strongest
TRAJECTORY: The severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday, and would influence the nation to varying degrees, a forecaster said The Central Weather Administration (CWA) yesterday said it would likely issue a sea warning for Tropical Storm Podul tomorrow morning and a land warning that evening at the earliest. CWA forecaster Lin Ting-yi (林定宜) said the severe tropical storm is predicted to be closest to Taiwan on Wednesday and Thursday. As of 2pm yesterday, the storm was moving west at 21kph and packing sustained winds of 108kph and gusts of up to 136.8kph, the CWA said. Lin said that the tropical storm was about 1,710km east of Oluanpi (鵝鑾鼻), Taiwan’s southernmost tip, with two possible trajectories over the next one
GET TO SAFETY: Authorities were scrambling to evacuate nearly 700 people in Hualien County to prepare for overflow from a natural dam formed by a previous typhoon Typhoon Podul yesterday intensified and accelerated as it neared Taiwan, with the impact expected to be felt overnight, the Central Weather Administration (CWA) said, while the Directorate-General of Personnel Administration announced that schools and government offices in most areas of southern and eastern Taiwan would be closed today. The affected regions are Tainan, Kaohsiung and Chiayi City, and Yunlin, Chiayi, Pingtung, Hualien and Taitung counties, as well as the outlying Penghu County. As of 10pm last night, the storm was about 370km east-southeast of Taitung County, moving west-northwest at 27kph, CWA data showed. With a radius of 120km, Podul is carrying maximum sustained
RSS