Page last updated at 15:09 GMT, Wednesday, 21 April 2010 16:09 UK

General Motors repays $8.1bn in loans to US and Canada

General Motors SUV vehicles
General Motors says repaying the loans is a step to reducing state ownership

General Motors has repaid $8.1bn (£5.2bn) in loans it received from the US and Canadian governments, less than a year after emerging from bankruptcy.

The carmaker said the repayment marked an important step towards GM reducing government ownership of the firm.

GM received almost $62bn from the US and Canada as recession brought it to the brink of collapse.

The company, which has closed 14 factories in the US, also said it would now invest $257m in its US plants.

Ed Whitacre, GM's chief executive, told a press conference: "I am very pleased to announce that, as of today, GM has repaid in full and with interest the loans made last July by the US Treasury and Export Development in Canada.

"We are able to repay the taxpayers ahead of schedule because we are designing, building and selling the best cars and trucks GM has ever produced," he added.

But GM, which owns the Vauxhall and Opel brands, still owes $45.3bn to the US and $8.1bn to Canada, money it received when the US and Canada took large stakes in the company.

The US government owns 61% of GM and Canada about 12%. GM plans to start repaying this money with a share placing, possibly as early as this year if it can convince investors that the recovery strategy is working.

Investment

The company has also begun investing in production plants again. This includes $136m to be spent at an assembly plant at Fairfax, Michigan, and $100m at a production site in GM's heartland, Detroit.

GM, which filed for bankruptcy protection last year, closed 14 factories and shed more than 65,000 jobs in the US. It emerged from bankruptcy protection in July.

Earlier this month, the company reported a $4.3bn (£2.8bn) net loss for July to December of last year.



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