GM Pays Off Government Loan Before Deadline

21 April, 2010 12:23:00

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General Motors announced that the company has made its final payment of $5.8 billion to the U.S. Treasury and Export Development Canada, paying back its government loans in full, ahead of schedule.

The U.S. biggest automaker also announced an investment of $257 million at its Fairfax, Kansas, and Detroit Hamtramck assembly centers. The investment will prepare Fairfax to build the next generation of Chevrolet’s award-winning Malibu, and make Detroit Hamtramck a second source for Malibu.

The U.S., Canadian, and Ontario governments, as part of the launch of the new GM, provided loans of $8.4 billion and took equity stakes in the new company.

Today’s payment of $5.8 billion ($4.7 billion to the US Treasury and $C1.1 billion to Export Development Canada) completes the payback of these loans.

Sales for GM’s four brands are up 36 percent through March versus the same period in 2009, and many newly introduced cars and crossovers – including Chevy Equinox, Camaro and Traverse; GMC Terrain and Acadia; Buick LaCrosse; and Cadillac SRX – remain in short supply at GM dealers.

The Fairfax plant currently builds two of GM’s strongest selling cars, the Chevy Malibu and Buick LaCrosse. For the first three months of this year, GM’s U.S. dealers delivered more than 49,000 Malibus and 14,000 LaCrosses, representing a 58 percent increase over the same period last year. In response to this strong demand, Fairfax in February added a third shift of approximately 1,050 jobs, bringing total employment at the plant to more than 3,800.

Fairfax will become the primary source for the next generation of the Malibu. Detroit Hamtramck, which builds the Buick Lucerne and Cadillac DTS, will be equipped to build the Malibu as well, ensuring that Chevrolet can meet market demand.

Detroit Hamtramck will also build the Chevy Volt electric vehicle with extended range, which launches this year. On March 31, the plant celebrated a major milestone, the building of the first pre-production Volt on the regular assembly line.

The Malibu-related investments of $136 million in Fairfax and $121 million in Detroit Hamtramck will include facilities, machinery and equipment, and tools.

Since the launch of the new GM last July, the company has announced investments of more than $1.5 billion at 20 facilities in the U.S. and Canada. These investments restored or created more than 7,500 jobs, and they demonstrate a strong commitment to GM’s future and to the United States and Canada.

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