AP Source: GM To Begin Repaying Aid By Year-end

KEN THOMAS

WASHINGTON (AP) — General Motors Co. will begin paying back $6.7 billion in U.S. government loans by the end of 2009 and could pay off that full amount by 2011, four years ahead of schedule, according to a person familiar with the matter.

The government debt represents about 13 percent of the $52 billion that U.S. taxpayers have invested in General Motors, the majority of which was exchanged for a 61 percent ownership stake in the company.

GM will announce the repayment plan Monday when it releases its preliminary third-quarter earnings results, the person said, speaking on condition of anonymity. The person was not authorized to speak publicly about the plan ahead of the announcement.

Even if GM pays back these loans early, government investigators have questioned whether taxpayers will recoup their full investment in GM and fellow bailed-out automaker Chrysler Group LLC. GM, which exited bankruptcy as a new privately held company on July 10, has said it hopes to sell stock to the public late next year so taxpayers can recoup at least part of their remaining investment.

However, the Government Accountability Office said in a report issued earlier this month that the automakers' share values would have to soar to levels they didn't even approach when they were healthier for the $80 billion in taxpayer loans to be completely repaid.