APRIL 19, 2010, 4:05 P.M. ET.

GM Accelerates Loan Repayment

By SHARON TERLEP

General Motors Co. will repay $4.7 billion in U.S. government plans ahead of the company's self-imposed deadline of June, a step toward shedding the stigma of last year's federal bailout, a person familiar with the matter said Monday.

GM Chairman and Chief Executive Edward E. Whitacre Jr. sees repaying what's left of its $6.7 billion U.S. Treasury loan as a critical step toward winning back customers in the U.S. Ford Motor Co.'s status as the only Detroit auto maker without bailout cash has helped the company outperform its rivals.

The repayment also signals that GM is confident the company has enough financial stability to go without the extra money. GM lost $4.3 billion in the last half of 2009, but Mr. Whitacre has said to expect a "solid" first-quarter when GM announces its financial results next month.

Mr. Whitacre is expected to make the official announcement with further details Wednesday at GM factory in Kansas and also will travel to Washington D.C. this week. GM would not comment on the repayment plan.

GM had until 2015 to repay the loan, but the auto maker has gradually pulled ahead its repayment plan. In November, former Chief Executive Frederick "Fritz" Henderson promised to repay the money by mid-2011. Mr. Whitacre in December said the money would be repaid by the end of June, and recently has hinted the payback would come even sooner. The company made two $1 billion repayments, in December and March.

Under the terms of a $50 billion bailout it received from the Treasury starting last December, GM agreed to repay the government in the form of a $6.7 billion direct repayment and a 60% equity stake. The Treasury plans to start selling off the equity stake after GM launches an initial public offering. Mr. Whitacre backed off a timetable set Mr. Henderson to go public sometime this year. Instead, Mr. Whitacre has said, he is focused on making the loan repayments and stabilizing GM's operations to make the company more attractive to potential investors.

GM has rounded up government officials, union employees and others to join in announcement Wednesday. A local government official in Kansas City, Kans. said he received a "gleeful" call from GM telling him he needed to be present for Wednesday's announcement though he wouldn't learn the news until that day.

The company repayment of the debt will help win over customers turned off by the bailout. Chrysler LLC, which also received federal money and went through bankruptcy, has suffered as well in the aftermath. Meantime, Ford has capitalized on its status as the only company to dodge Ch. 11.

GM's U.S. sales are up 17% though March; Ford sales surged 38% in that period, according to Autodata.com.

Write to Sharon Terlep at sharon.terlep@dowjones.com

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