General Motors Withdraws $14 Billion Federal Loan Application
General Motors (GM) said Thursday it was withdrawing its application for $14.4 billion in loans from the Department of Energy. With the company making big strides in turning around its business, GM said it no longer wants the money, which the automaker had sought to help it manufacture more 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, in a statement. "Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet."
GM submitted the application to DOE in October 2009 to take advantage of a $25 billion program that provides loans to companies to help them retool factories to make more fuel-efficient vehicles and components.
Liddell said the action won't slow GM's plans to bring new vehicles and technology to market "as quickly as we can." CEO Daniel Akerson is eager for GM to develop new products and get them into dealer showrooms faster. To that end, last week he appointed Mary Barra to the post of global product development chief to lead the effort.
Eager to Dump 'Government Motors' Label
GM's decision to not pursue loans from the DOE comes as the automaker seeks to improve its image among consumers following its government-backed bankruptcy in 2009. The restructuring, which put U.S. taxpayers on the hook for nearly $50 billion, has resulted in the reconstituted GM being dubbed "Government Motors" by those critical of the bailout.
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GM emerged from bankruptcy in July 2009 and became a publicly traded company once again in November after the successful sale of $23 billion in stock in an initial public offering.
The company's momentum has been aided by the introduction of several new models, including the Chevrolet Cruze compact and Buick Regal midsize sedan. Its lineup of crossover utility vehicles has also proved popular with car buyers.
Rival Ford Motor (F) has received $5.9 billion in loans under the DOE program, out of a total of some $8.5 billion awarded thus far. The only remaining domestic automaker, Chrysler Group, has applied for loans under the program, but the agency hasn't made a decision on whether to lend it the money, The Wall Street Journal reported.
More Volts Sooner
Separately, GM said Thursday it is speeding up the nationwide introduction of its Chevrolet Volt hybrid as it seeks to begin sales in all 50 states by year-end -- six months sooner than originally planned. The automaker currently sells the Volt in only a few select states: New York, California, Connecticut, New Jersey, Texas, and the Washington, D.C., area, with deliveries to Michigan expected to start in the spring.
Customers anywhere in the U.S. will be able to order Volts at participating dealers in the second quarter. The vehicles will begin hitting dealer showrooms in Virginia, Maryland, Delaware, Pennsylvania, North Carolina, South Carolina, Georgia, Florida, Oregon, Washington state and Hawaii in the third quarter, GM said.
The company expects the Volt to be available in all 50 states during the fourth quarter.
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