GM starts to pay state aid back early
AILING US car giant General Motors (GM) yesterday said it would start repaying $6.7bn (£4bn) in government bailout loans, as it reported a smaller than expected $1.2bn loss for the three months to the end of September.
In its first set of results since emerging from bankruptcy in July, the owner of Opel and Vauxhall said it would begin paying off the state aid with a $1.2bn repayment in December, much earlier than originally hoped.
Sales at the so-called “New GM”, which was slimmed down following bankruptcy, fell by 26 per cent to $28bn.
Meanwhile, chief executive Fritz Henderson raised hopes for the future of threatened jobs at its British arm Vauxhall, after he heaped praise on one of its UK factories.
He said the group’s plant in Ellesmere Port on Merseyside, which makes the Vauxhall Astra and employs more than 2,100 people, was “extremely efficient”.
“I feel very good about the plant,” he added.
GM shocked the industry and unions when it said earlier this month it was ditching a plan to sell GM’s European operations, which include Vauxhall in the UK and Opel in Germany, to Canadian car part maker Magna International.
Despite the decision to axe the Magna deal, trade unions still fear GM may axe thousands of jobs in the UK, where GM employs about 5,000 people in total.
The maker of American cars like Chevrolet, Cadillac and Buick, also said that it had started repaying a €900m bridging loan to the German government.
The New GM has cut 34,000 jobs globally from the start of the year, eliminated $78bn of debt and built up a cash hoard of almost $43bn thanks to its bailout. It has also cut its US inventories of unsold vehicles in half.
“They are still on life support as a business and they are going to continue to be,” said Mirko Mikelic, a portfolio manager at Fifth Third Bank.