Former U.S. Car Czar Steven Rattner said today that GM and Chrysler have performed better than he would have expected them to one year ago. Before speaking at a conference on the auto industry at the Detroit branch of the Federal Reserve, Rattner said that both companies have exceeded the government’s metrics in sales and restructuring.
Rattner said that based on public statements by GM execs, the announcement of a Q1 profit is likely. He also said that based on trading price of old GM’s bond price last week, the government is likely to recover 80% of its $50 billion investment in the company, or $40 billion.
‘Old GM’ includes all assets left behind when the company went through bankruptcy last year. Its bondholders do hold some recovery rights when the ‘New GM’ starts selling stock to the public. The government is among those with such rights, considering its 61% stake in the company.
GM repaid $6.7 billion of the government loans last month.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)