GM to come through on its debts

Posted on 11 Nov 2009 by The Manufacturer

General Motors chairman Ed Whitacre has avowed that the company will repay all the hand-outs it has been given by the US government to keep it afloat and defended its decision to pull out of the deal to sell GM Europe.

Speaking at Texas Lutheran University Whitacre said the auto giant was on its way back to health following its July bankruptcy. He said: “Can GM pay back its loans? You bet. I can’t tell you when, but it won’t be very long.”

GM, currently majority owned by the government, owing to the state loans, is expected to be publicly traded again next year when it returns to profitability. Whitacre said the timing of this will depend on the stability of the US economy and higher employment levels in the country.

But staff cuts at GM itself was one of the reasons Whitacre gave for the sturdiness he now assured. He also pointed to a slight sales increase in October.

Last week GM pulled out of a move to sell its European subsidiary – the maker of the Opel and Vauxhall marques – to Canadian car parts maker Magna after the deal had seemingly been completed. Whitacre said the company was keen to keep GM Europe for its global strategy. “Our financial fortunes had improved enough that we re-examined (the sale),” he said.