Payback Time

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According to “a source familiar with the matter,” General Motors is planning to pay off its government loan earlier than expected:

The nation’s largest automaker plans to pay $1 billion per quarter until the $6.7 billion loan is repaid, according to a source familiar with the matter.

….”This is a result of the company performing modestly above expectations,” said the source, who spoke on the condition of anonymity to discuss the situation. “Obviously, the company has a long way to go and a lot of important things to execute on.”

….The $6.7 billion debt is not due to be repaid until July 2015, but the company has exceeded projections, partly by going through bankruptcy more rapidly than it thought it would, and partly by cutting costs.

Am I the only one who thinks this is dumb?  Is GM really that convinced that it’s out of the woods and won’t be running short of cash anytime in the next few years?  Why?  Has the business cycle suddenly been repealed without anyone telling me?  Are customers suddenly swooning over GM cars?  What’s going on?

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FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

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