WASHINGTON, D.C. — Acknowledging significant improvement in its business performance, General Motors (GM) says 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 Co. 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 toward new, fuel-efficient cars like the extended-range electric Chevrolet Volt and the Chevrolet Cruze as well as 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.
News of GM’s loan withdrawal comes on the heels of media reports that the government has been slow to follow through on its promise of providing loans through the Advanced Technology Vehicles Manufacturing Loan Program.
According to a report from the Detroit News, the DOE has awarded less than $8.5 billion from the $25 billion available through the program. According to paper’s report, more than 100 companies initially applied for the program, totaling approximately $42.7 billion in loan requests.
