GM Withdraws Federal Loan Application

News provided by

Jan 27, 2011, 09:53 ET

WASHINGTON, Jan. 27, 2011 /PRNewswire/ -- Acknowledging significant improvement in its business performance, General Motors today announced it is withdrawing its $14.4 billion application for direct loans from the U.S. Department of Energy (DOE).

The Advanced Technology Vehicles Manufacturing Loan Program (Section 136 of the Energy Independence and Security Act passed in December 2007) authorized $25 billion in direct DOE loans to companies toward retooling U.S. factories to make vehicles and components that improve fuel economy.

"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. "Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet."

Since July 2009, the newly formed General Motors Company successfully launched a $23.1 billion Initial Public Offering of stock and, for the first nine months of 2010, generated $4.2 billion in net income attributable to common stockholders. Additionally, GM has invested approximately $3.4 billion in U.S. facilities that have created or retained nearly 11,000 jobs – most of which have gone towards new, fuel efficient cars like the extended-range electric Chevrolet Volt, the fuel-sipping Chevrolet Cruze, and advanced battery manufacturing.

"Our forgoing government loans will not slow our aggressive plans to bring more new vehicles and technologies to the market as quickly as we can," said Liddell. "We will continue to make the necessary investments to assert our industry leadership in technology and fuel economy."

The U.S. Congress appropriated funding for the DOE loan program in the fall of 2008 at a time when the auto industry was seeking to maintain its product and technology programs while contending with the developing global economic crisis.

GM submitted its current application to the DOE in October 2009.

About General Motors – General Motors Company (NYSE: GM, TSX: GMM), one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 209,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, Italy, Russia, Mexico, and Uzbekistan. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.