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May 06, 2021

Is GM right in saying it's repaid its loan "in full"?

If you’re like me, you saw that recent ad from GM and thought, “Huh, really? That’s pretty good.”

You know the one I’m talking about. The one where Ed Whitacre, GM’s new CEO, saunters through an assembly plant, speaking about the future of the bailed-out auto maker and boasting that it’d paid back its “government loan, in full, with interest. Five years ahead of the original schedule.”

Admittedly, it nearly made me a believer again in the once-mighty, bankrupted corporation. And I don’t think I was alone. By most accounts, the ad was good, pick-yourself-up-and-dust-yourself-off PR for the embattled General Motors.

But that was before smarter people than I got a hold of the commercial, and it turns out maybe GM isn’t being totally honest.

Daniel Howes of the Detroit News – who we’d figure has a pretty good handle on this GM thing – points to some glaring discrepancies between the facts and the auto maker’s ad.

The big enchilada is simply this: the “repayment” of $4.7 billion came from taxpayer cash advanced to GM, and the federal government still owns a 61 per cent stake in the auto maker – valued at around $43 billion.

That doesn’t sound like an “in full” payback, does it?

“We are concerned that GM, under your leadership, has come dangerously close to committing fraud, and that you might have colluded with the United States Treasury to deceive the American public,” Rep. D Darrell Issa (R-Calif.) wrote to Whitacre last week, in regard to the ad’s dubious claim.

“If someone relies on your statements in the future … your false statements may expose GM to millions of dollars in damages, further reducing the value of the taxpayer-owned company.”

Political pandering aside, Howes seems to sum the issue up best:

“It all comes down to this: GM’s credibility. Saying you’ve paid back a loan, but omitting the fact that you did it with taxpayer money and that the feds still hold a controlling stake in your business, probably isn’t the wisest way to win friends, woo new customers or rebuild trust.”

How do you score all this?

If GM has paid back its government loan with taxpayer cash, is it right for the auto maker to boast so strongly of its repayment efforts, as it does in the now-controversial ad? Has General Motors misled the public?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...