General Motors to start repaying government

WASHINGTON — General Motors will begin paying back $6.7 billion in U.S. government loans by the end of this year 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.

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.

GM 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 this month in a report that the automakers' share values would have to soar to levels never approached when they were healthier for the taxpayer loans to be completely repaid.

Under the plan to pay back the $6.7 billion, the Detroit automaker will make quarterly payments of $1 billion to the U.S. government and $200 million to the Canadian government beginning this year.

GM would be on track to pay off the $6.7 billion U.S. debt and a $1.4 billion debt to Canada by the middle of 2011, well ahead of a mid-2015 deadline to repay the two governments.

Detroit-based GM is working to overhaul its operations and return to a profit after filing for Chapter 11 protection June 1 in the wake of $88 billion in losses since 2004.

The automaker is trying to build on its results in October, when its monthly U.S. sales rose for the first time since January 2008 and market share topped 20 percent.

GM sales of cars and trucks rose 6.6 percent in October.

Earlier this month, GM's board agreed to keep full ownership of its Opel division.