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General Motors says it lost more than $1 billion in the third quarter, but the head of the U.S. auto giant says the company has performed better than expected. GM CEO Fritz Henderson says as a result, the company is now in a better position to begin repayment of nearly $7 billion in emergency U.S. government loans.
The GM plan to repay debt by 2011
General Motors posted a third quarter loss of $1.1 billion (November 16), but says stabilizing sales and lower operating costs will allow the company to repay what it owes the U.S. government by the end of 2011 - four years ahead of schedule.
GM Chief Executive Fritz Henderson says the first payment of $1 billion will go out in December. "It's a commitment from the entire leadership team in 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," he said.
The debt represents 13 percent of the $52 billion that U.S. taxpayers have invested in General Motors - the majority of which was exchanged for a 61 percent ownership stake in the company.
Earnings are better than expected
Despite suffering a net loss in the third quarter, GM Chief executive Fritz Henderson says company earnings were better than expected. "Again, these are managerial numbers. Not satisfactory. I mean, certainly much lower than what has been," he says, "Although it is not necessarily comparable, and certainly better than our plan going into bankruptcy. But nonetheless it's a loss and you cannot be satisfied with it."
Much of the company's third quarter sales came from overseas as a result of GM's expansion in Asia. The new numbers coincided with President Obama's visit to China. "GM is an American company with tens of thousands of employees in this country," he explains, "and responsibility for its future ultimately rests with us."
GM, which emerged from bankruptcy in July, has lost $88 billion since 2005. But there were encouraging signs Monday for U.S. automakers as the government released new consumer numbers.
U.S. retail sales grew 1.4 percent in October, boosted by a seven percent jump in vehicle sales.