It’s not as good as black ink, but General Motors’ news that it doesn’t need government loan money this month is a sign that it is finally starting to bring its gargantuan expenses under control.
GM Chief Financial Officer Ray Young said Thursday that the struggling automaker’s fortunes have improved to the point that it won’t need the $2 billion March installment, despite the request the company made less than a month ago.
But Young wouldn’t say when the GM might need more help, nor would he say whether it planned to reduce its request for a total of $30 billion in government financing.
General Motors Corp., along with Chrysler LLC, is living on government money as the entire auto industry tries to weather a global recession. In a viability plan submitted to the government Feb. 17, GM said it would need $2 billion in loans this month and $2.6 billion more in April to keep operating.
But Young said GM’s restructuring efforts are beginning to take hold, resulting in less spending as U.S. auto sales dropped to their lowest level in 27 years.
“It seems like our companywide cost reduction efforts are moving well, as well as we’ve been able to defer spending that we previously anticipated in January and February,” Young said in an interview. “I think that’s a positive development.”
Young said GM told members of the Obama administration’s auto task force Wednesday that it would not need the March installment.
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