GM will start loan repayments 6 years ahead of schedule


Production version of the GM/Chevy Volt

Almost 90 days after coming out of bankruptcy, General Motors is showing signs of getting healthy and moving closer to getting back in the black.

And there’s no doubt, the “new” GM is doing far better than the old GM:

  • Cash flow was positive $3.3 Billion
  • Structural costs dropped $6.7 Billion
  • Starting next month, GM will repay $1.2 Billion of its $8.1 Billion in loans to the U.S. And Canadian governments
  • All encouraging signs. But critics will point out some other troubling signs at GM.

    GM lost $261 Million before special charges

  • The company will have negative cash flow in the fourth quarter due to a number of factors, including the loan repayment.
  • All of which brings up the question: How much has really changed at GM?

    Actually, quite a bit.

  • The company’s global market share is up slightly to a total of 11.9 %.
  • In the U.S., consideration of General Motors vehicles is picking up.
  • China, which has become the #1 market in the world for auto sales, GM is not only holding the top position, it’s in position to grow with that market.
  • The company moves quicker, and with more purpose than a year ago as it was sliding towards bankruptcy.
  • So what should we take away from GM’s third quarter financial results?

    This company is definitely in better shape than it was before bankruptcy and is better position to get back in the black as auto sales pick up. In other words, it’s steady progress. Not spectacular, but steady.

    Beancounters are happy – I’m happy. Doesn’t mean I’ll stop offering advice; but, who listens to me, eh?

    2 thoughts on “GM will start loan repayments 6 years ahead of schedule

    1. Cinaedh says:

      People need vehicles.

      Build a superior, dependable vehicle, sell it at a fair price and lots of people will buy one.

      Whew! That thorny problem is finally solved.

      Can I have my tens/hundreds of millions of dollars in bonuses and stock options now?

      No?

      OK, I’ll settle for occasional use of the corporate jet, just once or twice a year.

    2. Mr. Fusion says:

      GM, Ford, and Chrysler all suffer from the same disease. Health care costs of their retired workers. Those legacy costs will continue to haunt them until America finally goes to a single payer system.

    Leave a Reply

    Fill in your details below or click an icon to log in:

    WordPress.com Logo

    You are commenting using your WordPress.com account. Log Out /  Change )

    Twitter picture

    You are commenting using your Twitter account. Log Out /  Change )

    Facebook photo

    You are commenting using your Facebook account. Log Out /  Change )

    Connecting to %s

    This site uses Akismet to reduce spam. Learn how your comment data is processed.