GM to announce company will pay back $5.8 billion in loans

Before General Motors CEO Edward Whitacre heads over to Washington on Wednesday, he will stop by the company’s Fairfax, Kansas plant to announce that the automaker will soon pay off $5.8 billion in loans from the U.S. and Canadian governments, well ahead of a June deadline.

People familiar with the plans said that Whitacre is set fly to the Fairfax plant early Wednesday and then fly to Washington to meet with House Speaker Nancy Pelosi and Michigan”s congressional delegation.

GM will use the move to highlight its progress towards issuing shares to the public and helping the Obama administration get out of its 60.1 percent ownership in the company. GM’s CFO Chris Liddell has said that the company could break even later this year.

The $5.8 billion payment will include $4.7 billion to the U.S. Treasury and $1.1 billion to the Canadian government. The money will come from a $16.4 billion escrow fund set up by the two governments as part of GM”s bankruptcy.

– By: Stephen Calogera

Source: Free Press