GM Withdraws Loan Application

By: Associated Press
By: Associated Press

WASHINGTON -- General Motors, in another sign of its progress since a government-led bankruptcy, said Thursday it is withdrawing its application for $14.4 billion in federal loans it had sought to help build more fuel-efficient cars.
GM, which has posted three straight profitable financial quarters since its 2009 bankruptcy, said it no longer needed the loans because the company's cash position has improved. GM applied for the loans in 2009 to modernize plants to build fuel-efficient vehicles.
"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. Liddell said withdrawing the application was "consistent with our goal to carry minimal debt on our balance sheet."
The $25 billion low-interest loan program is administered by the Energy Department. It was created by a 2007 law to help car companies retool older factories to build green cars.
Separately, GM said it would explore ways to increase production of the Chevrolet Volt rechargeable electric car. GM's vice president of global design Ed Welburn said at the Washington Auto Show that GM would also accelerate its distribution of the Volt, making it available to dealers in 50 states by the end of the year.
GM sought bankruptcy protection in 2009 and accepted nearly $50 billion in government help. The new GM had an initial public offering of stock in November.
Several automakers and auto suppliers have applied for loans from the federal energy program.
Ford Motor Co. was approved for $5.9 billion in loans to upgrade several factories to eventually produce 13 fuel-efficient vehicles. Nissan was approved for a $1.6 billion loan to retool its plant in Smyrna, Tenn., to build electric vehicles and construct a battery manufacturing plant. Tesla Motors Inc. received $465 million in loans to build electric vehicles and electric-drive powertrains in California.
Chrysler CEO Sergio Marchionne said last week the company was seeking about $3 billion in loans from the Energy Department. The automaker had hoped to receive the loans by the end of last year but the government is still trying to work out collateral with Chrysler, Marchionne said.
Marchionne said the loans would be used to develop engines, transmissions, frames and other components.

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  • by Terri Location: Washington on Jan 28, 2011 at 09:16 AM
    he glut of articles that came out this week about how GM & Chrysler had "Fixed" the ATVM loan for themselves seems to have put too much scrutiny on GM and further review would have tracked back to the dirty-secrets of who they bribed in Washington to get a private slush fund just for themselves at taxpayer and competitor expense. Nissan caught them and so they got some of the money too, making it Slush money AND Hush Money. No company would walk away from $14B that they are a shoe-in for unless they realized that deeper investigations would bring them to their knees and link all of the payoffs and "special dinners" together. Rattner, the guy at the White House who ran the car money is now facing criminal charges. The DOE staff that worked on it have been fired or “forcibly migrated” and all are under investigation by the Republicans who hated the Detroit deals and law enforcement. The big crime is all coming apart at the seams. You-know-what rolls downhill and Rattner started the roll
  • by JM Location: East Lansing on Jan 27, 2011 at 11:36 AM
    "GM says it no longer needs money to build more fuel-efficient cars" GM doesn't need money to build cars anymore? Fantastic! But, how are they going to buy parts, or pay workers?
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