GM posts $1.15 billion loss, vows to repay US bailout early
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General Motors reported a loss Monday of 1.15 billion dollars since emerging from bankruptcy in July, but said improving market conditions would allow it to repay state aid ahead of schedule.
AFP - General Motors reported a loss Monday of 1.15 billion dollars since emerging from bankruptcy in July, but said improving market conditions would allow the automaker to repay state aid ahead of schedule.
GM said it would step up repayments of bailout aid to the US and Canadian governments and pay off all German government assistance by the end of the month.
The number one US automaker said it would accelerate the repayments "in light of improving global economic conditions, stabilizing industry sales and its healthier cash position."
GM owes 6.7 billion dollars to the US Treasury and 1.4 billion US dollars to Canada for government aid to help the company emerge from bankruptcy as a new entity.
"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.
The company did not indicate when the US and Canadian aid would be fully repaid but said it would be "ahead of the scheduled maturity date of July 2015."
The automaker said it has begun repaying German state aid for its Opel division and will pay off the remaining 600 million dollars (400 million euros) by the end of the month.
In the unaudited results, a loss of 1.15 billion dollars from July 10 to September 30 was attributed the "new GM" despite improving market conditions.
GM said it expects "negative net cash flows in the fourth quarter of 2009" due to repayments of government aid and a 2.8-billion-dollar payment to help its former parts unit Delphi emerge from bankruptcy.
But in 2010, the company expects "modest growth" in the global automobile market including the United States, which will help its financial position.
"We have significantly more work to do, but today's results provide evidence of the solid foundation we're building for the new GM," chief executive Fritz Henderson said.
"With a healthier balance sheet and a competitive cost structure, our focus is on driving top line performance. We'll achieve that by winning customers over, one at a time, with vehicles that deliver performance and value."
GM said its results, which are not in compliance with US accounting standards, showed revenues in the third quarter of 28 billion dollars, including 26.4 billion from the "new GM" and 1.6 billion from the "old GM."
Operating results before interest and taxes for the new GM showed a loss of 261 million dollars.
GM said its global share was 11.9 percent in the third quarter, up 0.3 percentage points from the first half of the year for the old GM. The company's US market share in the third quarter was unchanged at 19.5 percent.
The automaker said it was optimistic because of significant cost cuts, having slashed total structural costs for the past period by 9.1 billion dollars.
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