GM will forgo federal loans to retool factories
General Motors Co. says it won’t need $14.4 billion in federal loans to pay for retooling its factories to make more fuel-efficient vehicles and auto components.
The loans from the Department of Energy were available to the Detroit automaker as part of a $25-billion program approved by Congress in 2007.
GM officials said Thursday that the move was part of the company’s strategy of carrying “minimal” debt.
“This decision is based on our confidence in GM’s overall progress and strong global business performance,” said Chris Liddell, GM vice chairman and chief financial officer.
“Our forgoing government loans will not slow our aggressive plans to bring more new vehicles and technologies to the market as quickly as we can,” Liddell said. “We will continue to make the necessary investments to assert our industry leadership in technology and fuel economy.”
The automaker successfully used a 2009 bankruptcy restructuring to shed factories, workers and debt and trim expenses to the point where it can make money even in an auto market that remains slow by historical standards.
GM has logged three consecutive profitable quarters — including a $2-billion gain in the third quarter — and is on track to have its first full-year profit since 2004. The company is expected to report its full 2010 financial results in the coming weeks.
GM shares closed at 38.67, up 78 cents.
