GM withdraws $14-bn US government loan application

Boosted by the significant improvement in its business performance, General Motors yesterday said that it it is withdrawing its $14.4-billion application for direct loans from the US Department of Energy (DOE), in a bid to carry reduced debt.

The Advanced Technology Vehicles Manufacturing Loan Program passed in December 2007 authorised $25-billion in direct DOE loans to companies for retooling factories in the US to make vehicles and components that improve fuel economy.   

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

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

''Withdrawing our DOE loan application is consistent with our goal to carry minimal debt on our balance sheet,'' said Chris Liddell, GM vice chairman and chief financial officer.

Liddell said that the decision to withdraw from the loan programme was based on the company's confidence in its overall progress and strong, global business performance.