GM losses not as bad as expected
TEXT OF INTERVIEW
Steve Chiotakis: General Motors reported today it’s hemorrhaging less money than many people had thought, which may be a good sign for U.S. taxpayers, who’ve had a lot of money — billions of dollars — doled out to the automaker. They may be getting some of it back soon.
Let’s check in with Marketplace Automotive Correspondent Alisa Roth, who’s with us live in our New York Bureau.
Hi Alisa.
Alisa Roth: Hello.
Chiotakis: So how does losing $1.2 billion turn into such good news?
Roth: OK, so $1.2 billion is obviously a lot of money. But it is less than GM has lost recently, and it’s a lot better than GM had predicted it would be doing at this point. So the company’s actually feeling pretty confident.
Chiotakis: So does that mean it’s ready to repay that loan early?
Roth: . . . Yes. You’ll recall that GM owes the government $6.7 billion, and it says it’s ready to make the first payment on that loan next month. So this new plan actually has GM paying off the entire loan by 2011, which is four years earlier than it has to. The CEO, Fritz Henderson, was talking about paying off the loan at a press conference this morning, and this is what he said:
Fritz Henderson: We’ve certainly felt, given our liquidity position, that we’re able to do it, and we’re committed to do this. We have to begin the process. It’s a personal commitment, it’s a commitment of the entire leadership team of the company to repay the taxpayer — first and foremost from repaying the loan, and then over time generating value in the shares so that the taxpayers benefit as major shareholders of the company.
Chiotakis: Now Alisa, he mentions shareholders and taxpayers there at the end. I mean, is GM talking about going public any time soon?
Roth: The original plan was to go public some time toward the end of next year. Last week, the chairman of the board said it’s way to early to be saying, you know, “we’re going public at this point,” and Henderson pretty much reiterated that today.
Chiotakis: All right. Marketplace’s Alisa Roth in New York. Alisa, thanks.
Roth: You’re welcome.
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