GM pays back US & Canadian loans way early

[8cd03gro]

Originally Posted by DGthe3

Last I checked we're in the 2nd quarter of 2010 and they were doing pretty well in Q1 2010.

And look at what was happening in the latter half of 2009. Q3 sales were generally still garbage and they just went through their bankrupcty. While Q4 showed improvement, they also payed $2.6B to the UAW as part of their healthcare restructuring plan (which goes into effect this year and will save them billions each and every year), $1.2B was payed back on their loans, and $1.6B was a "foreign currency re-measurement loss." So they had $5.4B lost in big, rare expenses and a total loss of $4.3B.

But perhaps you're right. GM is just spending money they don't have as a PR stunt.

They haven't spent it yet now have they? They're saying they will. They also said they weren't going bankrupt until they did

Like I said, I'll believe it when I see it. Do you guys remember, "We want to assure our customers and stakeholders than GM is not considering bankruptcy..." I don't know the exact quote, but it was something along those lines within a few weeks of their bankruptcy.

Originally Posted by FenwickHockey65

Someone bookmark this post so I can make him eat his words at the end of this year...

Don't worry, I'll bookmark it. We can talk about this in 2025 when GM has payed their loans back completely.

We'll see when even the first quarter is posted. If they even break even, I'll give you the benefit and "eat my words." You guys seem to think that good talk means good results, but I'll give you a little tip: A corporation will never talk about the bad.

[Revo1]

I've known about this for some time... The good news here is that the loans will be paid off early- Great news!

[DGthe3]

Originally Posted by 8cd03gro

They haven't spent it yet now have they? They're saying they will. They also said they weren't going bankrupt until they did

Technically, they haven't said they are going to pay it back way early yet ... the media has said GM will say it on wednesday.

[8cd03gro]

Originally Posted by DGthe3

Technically, they haven't said they are going to pay it back way early yet ... the media has said GM will say it on wednesday.

So, my point is more valid yet.

I'm not saying it's impossible guys, I'm saying I'll believe it when I see it. Talking a good game is nothing new and will happen even if they think they will post a loss.

[Mr. Wyndham]

Originally Posted by 8cd03gro

So you're saying without the costs of restructuring, they still posted a loss... so where is the money coming from to pay back the loans? It's not like restructuring costs don't lose real money. If they spend that money and don't make it back, it's a loss. They are 3.4 billion short of where they were at the beginning of the 4th quarter. Even if you don't count the restructuring costs, they still posted a net loss. You can't pay back loans with no profit whatsoever and losses to boot. So again, where is this money going to come from?

I'll believe it when I see it.

Well...as I told the folks who were convinced the gov't would take over and make GM produce Priuses and Cobalts: "Open your eyes and get ready to watch."

Money...is coming from ....gee...what is it they're selling a crap-ton of right now....OH -- CARS and TRUCKS!!

No Pontiac, Saturn, Hummer, and Saab means instant savings because those brands (despite opinions) were money-pits. Combined with the massively successful vehicles they've been releasing lately, and the restructured cost structure...they're MAKING MONEY, and thus paying off the loans. You really don't need to look far, my friend. They've already made two payments.

[8cd03gro]

Originally Posted by Dragoneye

Well...as I told the folks who were convinced the gov't would take over and make GM produce Priuses and Cobalts: "Open your eyes and get ready to watch."

Money...is coming from ....gee...what is it they're selling a crap-ton of right now....OH -- CARS and TRUCKS!!

No Pontiac, Saturn, Hummer, and Saab means instant savings because those brands (despite opinions) were money-pits. Combined with the massively successful vehicles they've been releasing lately, and the restructured cost structure...they're MAKING MONEY, and thus paying off the loans. You really don't need to look far, my friend. They've already made two payments.

A net loss means they have a NEGATIVE cash flow. They spent more than they made. They LOST MONEY. So, I'll ask the question once again: Where does this money come from? You need profit to pay off loans. It's impossible to do so otherwise. First 1/4 numbers for '10 are unknown, but based off of what we have, they won't even be close to paying off completely for a long, long time.

[DGthe3]

Originally Posted by 8cd03gro

A net loss means they have a NEGATIVE cash flow. They spent more than they made. They LOST MONEY. So, I'll ask the question once again: Where does this money come from? You need profit to pay off loans. It's impossible to do so otherwise. First 1/4 numbers for '10 are unknown, but based off of what we have, they won't even be close to paying off completely for a long, long time.

So improved sales vs last year, billions less in 1 time costs, billions saved in healthcare costs, and the ditching of unprofitable brands isn't going to be enough to post a profit in 2010?

[Mr. Wyndham]

Originally Posted by 8cd03gro

First 1/4 numbers for '10 are unknown, but based off of what we have, they won't even be close to paying off completely for a long, long time.

And they payed the first payment in the 1st Quarter...so why are we arguing this point?

And by the way....I'm not sure what you're thinking...but the total in loans is only something like $6bill (they've already repaid around $2 on a conservative schedule) The rest of the assistance they received was in the form of stock, not to be payed back but sold off to the public sometime this year.

[8cd03gro]

It's 6.7 and the rest is still to be payed back when stocks are sold. That's still a loan, not magic free money. I want GM to pay it back as much as everyone, I'm just saying, this little announcement doesn't mean, "oh, you'll have all your money back this year."

[8cd03gro]

Originally Posted by DGthe3

So improved sales vs last year, billions less in 1 time costs, billions saved in healthcare costs, and the ditching of unprofitable brands isn't going to be enough to post a profit in 2010?

It could be, maybe quite a bit, maybe minimal. They still haven't fixed all their problems and they well still have abnormal expenditures. They might be able to pay back within a few years, but they might not be able to. They aren't guaranteed to be posting big profits next year just because they had a smaller loss last year and fixed a lot of issues.

[Number 3]

Well actually, you don't need profit to pay off loans.

You can show a loss AFTER paying off loans.

And you are forgetting, GM is a global company. There are Billions going to restructure European operations as well. There is money going everywhere and I wouldn't even try to guess where it all ends up.

Also, it was reported, maybe not widely, that GM did have a postive cash flow in the first quarter, which is huge a change from pre bankruptcy.

I'm sure not going to pretend to have a grasp on the finances of GM right now, but there is a huge chunk in the bank, the debt is much smaller and despite what the press wants to print, GM is probably in better shape financially than Ford who owes about as much as GM and holds much more debt.

And compare GM to Chrysler who has basically said, thanks for the hand-out, don't expect your money back anytime soon.............or wait was it the Italians that said that?

GM will pay back the loans early. Great step. All that remains is the liguidation of the remaining equity stake the government holds. Keeping in mind, that the UAW will likely bail on their stake immediately. The government may or may not. So to me that is what is unclear. How long with the U.S. Government remain the largest stock holder?

[Sax1031]

I hope to god Ford has more debt than GM.

[8cd03gro]

http://www.freep.com/article/2010041...her-than-Fords

Read the ifs.

[Mr. Wyndham]

Originally Posted by 8cd03gro

http://www.freep.com/article/2010041...her-than-Fords

Read the ifs.

I read the WHOLE article. And it was a good one.