Auto Task Force: Dealer Arbitration, Loan Repayments Won’t Jeopardize GM
WASHINGTON - The Obama administration says General Motors Co. is in better financial shape than the federal government anticipated when it arranged $50 billion in assistance last year, Automotive News reported.
The automaker’s bottom line will not be jeopardized by dealer arbitrations that lead to reinstatements or settlements, or by $8 billion in loan repayments to the U.S. and Canadian governments in June, Ron Bloom, head of the administration’s auto task force, told reporters during a news conference.
Bloom made his comments after the U.S. Treasury Department said it and GM changed their loan agreement to require GM to repay, by June, the automaker’s entire $6.7 billion in U.S. debt, along with $1.4 billion owed to the Canadian and Ontario governments. The repayments were originally due in 2015.
The United States still owns 60 percent of GM.
Bloom said rejected-dealership arbitrations, due to begin after the filing deadline today at midnight, “will not produce a material adverse effect on the company.”
More than 1,200 dealerships, most with GM franchises, already have given notice that they intend to pursue arbitration. Arbitrators are due to hand down reinstatement decisions in June.
GM has targeted 2,000 dealerships for full or partial terminations by October.
The Obama administration’s pay restrictions on GM’s senior executives will continue even after the loans are repaid, Bloom said. It hasn’t been determined how long these pay limits will continue, he said.
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