General Motors Co and Chrysler Group LLC are in better financial shape than the US government expected them to be at this point of time, Ron Bloom, the head of the Obama administration’s autos task force told the Wall Street Journal.
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Bloom told the paper that GM is doing “slightly better” than government officials had expected, while keeping in mind factors such as market share, sales, cash reserves and product plans. GM is also on course to returning to the stock markets in the second half of next year, the paper cited Bloom as saying.
Largely by rebuilding cash reserves, Chrysler is also exceeding government expectations, Bloom told the paper.
Bloom, whose assessment is based largely on US vehicle sales, told the paper the Obama administration is hopeful sales will slightly improve in 2010.
“The industry remains challenged but is in slow recovery,” Bloom told Dow Jones Newswires. “The industry is coming back. It’s coming back slowly, but it’s coming back.”
The Treasury recently approached the auto maker about repaying loans to the US government on a speedier schedule, he said. GM now plans to repay US$6.7bn borrowed from the US government by June.
GM chairman and chief executive Edward Whitacre declined recently to speculate on when GM would launch a public offering.
Bloom said GM’s agreement with the administration requires the auto maker to make a “good faith” effort to proceed toward an initial public offering of stock by July.
An IPO occurring in the third or fourth quarter of 2010 is the administration’s “current expectation,” he said. “I would take a serious hard look at that statement at some time” in the first half of 2010 and then decide whether that timing still makes sense.
