- Apr 23, 2009
- Reaction score
- everywhere and nowhere
PolitiFact | CEO says GM has repaid government loans in fullIt's true that GM has squared up on its government loans, but Whitacre isn't telling the full story here.
With GM in deep trouble and hundreds of thousands of jobs in the balance, the Obama administration -- through the Troubled Asset Relief Program (TARP) -- stepped forward with tens of billions of dollars worth of assistance. As of March 31, 2010, the U.S. Treasury had committed approximately $52.4 billion to GM.
Only a fraction of that, $6.7 billion, was in the form of loans, however. Most of the government's GM investment was converted to an ownership stake in the New GM, the company that emerged from bankruptcy: $2.1 billion in preferred stock; and 60.8 percent of the company's common equity.
GM had already made several installments in paying back the $6.7 billion loan. But on April 21, 2010, GM announced that it had paid back the entirety of the remaining $4.7 billion in loans from the U.S. government (and another $1.1 million to the Canadian government). GM had until 2015 to pay back those loans.
So the loan portion of the GM bailout was, in fact, settled, with interest, five years ahead of schedule.
But the U.S. government is still on the hook for the bulk of its investment in GM. Again, the U.S. Treasury owns $2.1 billion in preferred stock and a 60.8 percent stake in the company
On March 18, 2010, the government's nonpartisan Congressional Budget Office projected the government will end up losing $34 billion in TARP funds extended to the automotive industry. The CBO didn't break out how much of that is tied to GM, but it's fair to say most of it.