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GM may repay some fed aid in ’09

November 11, 2009

GM may repay some fed aid in ’09

Bloomberg News

General Motors Co. Chief Executive Officer Fritz Henderson has the board’s backing, and the automaker may repay some of its $50 billion in U.S. bankruptcy aid this year, Chairman Ed Whitacre said.

"It’s conceivable we could pay back some of the loans before the end of the year," Whitacre, 68, said Tuesday. He declined to commit the company to an initial public offering next year.

GM is working to rebuild its image after filing for Chapter 11 protection June 1 in the wake of $88 billion in losses since 2004. The Obama administration named Whitacre, the former CEO and chairman of AT&T Inc., to lead the board after a federal bailout gave the government a 61 percent ownership stake.

"We have some momentum now; there’s a lot of enthusiasm," Whitacre said. "We’re all cautiously optimistic. The board is fully behind Fritz; he’s working hard."

Henderson, 50, became CEO in March when the government asked Rick Wagoner to step aside. GM’s board was told by the Treasury’s auto task force at an Aug. 3 meeting that Henderson had a 40 percent to 60 percent chance of fixing the automaker, a person familiar with the briefing said at the time.

The task force recommended that GM improve its odds by hiring more outsiders. Directors were told that GM is too insular, has too little accountability and lacks urgency in decision-making, the person said after the meeting.

Whitacre said GM isn’t rushing to hire outside executives for its restructuring.

GM has made several inside changes recently, and the move to bring in new blood will be meted out slowly, he said, without giving timing.

The automaker is trying to build on its results in October, when its monthly U.S. sales rose for the first time since January 2008, and market share topped 20 percent.

"One month does not a trend make, but were hopeful about November," Whitacre said. "We’re pleased, but it’s still pretty slow going out there."

GM hasn’t set a specific market share goal and doesn’t want to add significantly to incentives, he said. "We are just looking at ways to sell more vehicles, and it’s a very competitive market. We need to strike a balance," he said.

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