GM to repay government loans in June: CEO December 18, 2009
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General Motors will repay $6.7 billion US in government loans by the end of June, CEO Ed Whitacre, Jr. said Tuesday.
General Motors will repay all of its $6.7 billion US in government loans by the end of June, its chairman and CEO said Tuesday.
Ed Whitacre Jr. said the company plans to make quarterly installments starting this month with a $1.2-billion payment. He said it could repay sooner but that hasn’t been decided.
In addition to the loans, GM has received $45.3 billion in aid from the U.S. government which was converted into an equity stake.
Government pay restrictions will make the search for a new CEO more difficult, Whitacre said, but he’s confident the company can still find a strong leader.
Fritz Henderson resigned on Dec. 1 after he and the board differed on the direction of the company.
The Canadian Press, 2009
Mill gets $2.5M for upgrade from N.S. government September 22, 2009
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Bowater Mersey Paper Co. Ltd. is getting $2.5 million in funding from the Nova Scotia government to help it begin making book-grade paper.
The funding will be used to help the mill in Brooklyn, N.S., near Liverpool, make modifications necessary to begin producing the paper. The book-grade paper market tends to have more stable demand and pricing.
Bowater Mersey, owned by Montreal-based AbitibiBowater, has about 500 full-time employees at its newsprint mill, sawmill and other operations.
The company is spending more than $7 million on the project, which includes new manufacturing processes, technology and equipment.
Economic and Rural Development is supporting the company’s diversification plan through the Community Development Trust Fund.
“Bowater Mersey is managing through difficult economic times in this industry by finding innovative ways to reduce operating costs, improve productivity, and develop new product lines and markets,” Minister of Economic and Rural Development Percy Paris said in a release.
“The fundamentals of this company are solid and, along with the company, its employees, suppliers, and customers and various governments, we want this mill to continue to be a viable part of our economy and return to higher employment levels as the economy rebounds in the coming months.”
The paper, used mainly in paperback books, requires more demanding standards than those for newsprint.
Last Thursday, AbitibiBowater announced that it will cut production in half at the newsprint operation at the Brooklyn mill, and its 300 employees there will work reduced hours.
Besides the newsprint mill, Bowater Mersey also operates the Oakhill sawmill near Bridgewater, the Mersey Woodlands forest management group and the Brooklyn Power Corporation in Brooklyn, Queens Co.
With files from The Canadian Press (more…)
Charest to push through law allowing government deficits September 20, 2009
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Finance Minister Raymond Bachand says the bill allowing the government to have budget deficits is necessary to maintain public services.(CBC)
The Charest government is convening the national assembly for a special sitting Friday to force the passage of legislation allowing the province to suspend Quebec’s anti-deficit law.
The Opposition Parti Québécois has used legislative procedures to slow the adoption of Bill 40.
Usually, this type of measure is only used as a last resort toward the end of the parliamentary session when the Opposition is refusing to co-operate with the government.
Bill 40 would temporarily suspend the government’s obligation to table balanced budgets. Under the bill, the government would have a reprieve from the no-debt obligation through to 2013-14. The original law on balanced budgets was passed in 1996.
Finance Minister Raymond Bachand said the bill must be adopted to allow the government to maintain public services.
In its last budget, the government announced a $3.9-billion deficit. The government expects the debt to top $11 billion by 2013-2014.
(With files from The Canadian Press) (more…)
U.S. bank CIT seeks government support July 14, 2009
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Another U.S. financial company is looking to the U.S. government for backing.
CIT Group Inc., a lender to small and medium businesses, said over the weekend that it is in “active discussions with its principal regulators” about government support. Among other things, it is discussing a debt guarantee under a program run by the U.S. Federal Deposit Insurance Corp. (FDIC).
CIT needs government backing for loans or may have to restructure to ensure it doesn’t breach capital requirements. Like most lenders, CIT needs to borrow money to fund its operations, but credit has dried up because lenders have been reluctant to make loans to any but the best risks.
CIT New York trading over 3 months CIT’s poor first-quarter results, released in April, raised concern about the company.
A government guarantee of CIT debt under the FDIC’s Temporary Liquidity Guarantee Program would ease the financial pressure.
The company’s problems have knocked the share price down from $3.80 US on June 1 and $1.53 on Friday to $1.35 by the close Monday.
U.S. Treasury Secretary Timothy Geithner said Monday that the government could help CIT.
“I am actually pretty confident in that context that we have the authority and the ability to make sensible choices,” he was quoted as saying.
CIT received $2.3 billion in U.S. government backing in December.
The company faces larges debt repayments of at least $7.4 billion early in 2010.
With files from The Associated Press (more…)
Alberta government extends drilling incentives June 28, 2009
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The Alberta government has announced a one-year extension of two incentive programs introduced last March to help prop up the province’s energy sector during the global economic slowdown.
“Producers need to begin setting budgets for the upcoming drilling season, and we need to provide timely assurance that these programs will be extended,” Energy Minister Mel Knight said Thursday. Both programs were set to expire in March 2010.
This extension provides the certainty needed for oil and gas producers to plan new drilling programs, Knight said.
“Additional drilling results in new, ongoing royalty revenues for the province, keeps businesses going and people employed,” he said.
The new well incentive program will be extended. It offers a maximum five-per cent royalty rate for the first year of production from new oil or gas wells.
The drilling royalty credit for qualifying wells will also be extended. That program provides a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from 2008.
“This extension responds to market challenges facing oil and gas exploration in Alberta,” Knight said.
A review of Alberta’s overall competitiveness in the energy sector will be completed by fall, the energy minister said.
Alberta government extends drilling incentives June 25, 2009
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The Alberta government has announced a one-year extension of two incentive programs introduced last March to help prop up the province’s energy sector during the global economic slowdown.
“Producers need to begin setting budgets for the upcoming drilling season, and we need to provide timely assurance that these programs will be extended,” Energy Minister Mel Knight said Thursday. Both programs were set to expire in March 2010.
This extension provides the certainty needed for oil and gas producers to plan new drilling programs, Knight said.
“Additional drilling results in new, ongoing royalty revenues for the province, keeps businesses going and people employed,” he said.
The new well incentive program will be extended. It offers a maximum five-per cent royalty rate for the first year of production from new oil or gas wells.
The drilling royalty credit for qualifying wells will also be extended. That program provides a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from 2008.
“This extension responds to market challenges facing oil and gas exploration in Alberta,” Knight said.
A review of Alberta’s overall competitiveness in the energy sector will be completed by fall, the energy minister said.
U.S. government lends $8B for ‘green’ vehicles June 24, 2009
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The prototype Tesla Model S on a test drive in March. (Reed Saxon/Associated Press)
The U.S. government is lending $8 billion US to companies that are working on green vehicles, including electric cars, President Barack Obama said Tuesday.
The conditional loans represent “an historic opportunity to help ensure that the next generation of fuel-efficient cars and trucks are made in America,” he said.
The government hopes the loans will create jobs and reduce U.S. reliance on imported oil.
The recipients include:
Ford Motor Co., which will get $5.9 billion to update factories in five states to make 13 more fuel-efficient models, including the Focus, Escape, Taurus and F-150 pickup.Nissan North America, which will get $1.6 billion to retool a Tennessee plant to make electric cars and to build a battery factory.Tesla Motors, which will get $465 million to make electric-drive trains and vehicles in California.
“These investments will come back to our country many times over,” Energy Secretary Steven Chu said.
Electric car to benefit
Tesla, a privately owned company, will use most of the loan to finance a plant for its Model S sedan, introduced in March.
The car runs entirely on electricity from any conventional 120-volt or 220V outlet, and will get the equivalent of more than 250 miles per gallon (106 kilometres per litre), the government said.
The Model S has an anticipated base price of $49,900 US (including a $7,500 federal tax credit) but the company said the lifetime ownership costs are comparable to a conventional car costing $35,000 because electricity is cheaper than gasoline and the car requires less maintenance.
Production is slated to begin in 2011 and as many as 20,000 cars could be produced by the end of 2013.
More than 100 companies applied for loans under the Department of Energy’s Advanced Technology Vehicles Manufacturing program to raise fuel efficiency.
The program has $25 billion in loans to allocate to companies making cars and components in U.S. factories that increase fuel economy at least 25 per cent above 2005 levels.
Manitoba hog farmers plead for government help June 23, 2009
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Manitoba hog producers want the province to step in with an emergency bailout.
They say their industry is on the verge of collapse because of high feed prices, fluctuating currency exchange rates and low pork prices.
They want the provincial government to provide a short-term bailout for hog farmers, similar to programs set up in Saskatchewan and Alberta.
Manitoba Pork Council president Karl Kynoch said hog producers are to make their case Monday night to politicians at a meeting in Morris, Man., about 70 kilometres south of Winnipeg.
Kynoch told CBC News he hopes the province doesn’t turn them down as the federal government did. He said if hog producers fail, many other jobs in trucking and meat packing would also be lost.
“A lot of people don’t realize the effect it’s going to have, but it is going to reduce trucking jobs, veterinary jobs. There will be feed mills that will shut down, and a tremendous amount of spinoff jobs. And if we lose too many producers, at the end of the day we’re going to lose packers and that will turn into thousands more jobs that will be lost in this industry.”
Kynoch said many producers have cleaned out their savings accounts and retirement funds, and are on the verge of quitting. He acknowledged the best long-term solution for the industry is a worldwide cull to reduce the number of hogs.
“I’m really hoping that tonight is not about politicking. This is about producers and government being able to come up with some ideas to try to get us a long-term strategy and try to get us some help to bridge the short-term financing to get us back to the profit margin.”
Federal government rolls out $1B aid plan for pulp and paper producers June 17, 2009
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Under a new federal program, mills across the country can apply for money to improve energy efficiency and environmental performance.(Jeff Bassett/Canadian Press)
The federal government is rolling out a $1-billion aid package for Canadian pulp and paper producers.
Natural Resources Minister Lisa Raitt and Denis Lebel, the minister of state for the Economic Development Agency of Canada for the Regions of Quebec, announced the package in Ottawa on Wednesday.
What is black liquor?
Mills have long burned “black liquor” — a byproduct created when wood is processed into fibre — to generate steam energy. According to the Center for Paper Business and Industry Studies, about 240 million tons of black liquor are produced every year around the world.
In March 2009, the financial services group J.P. Morgan released a report suggesting many U.S. mills were “burning black liquor into gold.” Under the U.S. program, mills that combine diesel fuel with a pulp byproduct can qualify for a biofuel tax credit. The report said an average sized U.S. pulp mill would burn more than 175 million gallons of black liquor in a year, earning an annual credit of $90 million US.
Raitt said that only mills producing “black liquor” between January 1 and December 31 of this year will be eligible. Black liquor is a biomass by-product of the chemical pulping process that is used by pulp producers to generate energy for their mills.
The federal government said that under its Green Transformation Program, it will provide 16 cents in funding per litre of black liquor, up to a maximum total of $1 billion.
Raitt said 27 mills across the country will be eligible under the program.
Producers participating in the program will be required to invest the money over the next three years on improvements to their energy efficiency or their environmental performance at any pulp and paper mill in Canada.
The move comes after Canadian firms sought aid from the government in response to a black liquor subsidy received by U.S. producers, who get a tax credit for using the alternative fuel. The U.S. black liquor subsidy is estimated at $6 billion to $8 billion.
Pro and con
The head of a Canadian forestry business group applauded Ottawa’s move, but Canada’s largest forest union denounced it.
“It won’t save any mills or prevent further job loss,” said Communications, Energy and Paperworkers Union president Dave Coles.
The money cannot be used to lower the cost of making pulp, which is necesary to compete with the U.S. mills that are using the U.S. black liquor subsidy to cut their costs and sell more pulp, he said.
“In the short term, mills will still close because in order to take advantage of the subsidy, they must invest in capital,” Coles said. He fears this will lead to more lost forest industry jobs on top of the 55,000 the union says has already disappeared over the last two years.
However, Avrim Lazar, president of the Forest Products Association of Canada, welcomed the program. “This is a government getting it right,” he said, adding that it will lead to a greener industry and will conserve jobs.
“This is very smart spending,” Lazar said.
U.S. government directs GM on quick bankruptcy filing: report April 14, 2009
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The U.S. government is directing General Motors in preparations for a quick “surgical” bankrupty filing with a June 1 deadline, the New York Times reported Sunday, citing unnamed sources.
The newspaper said the filing is being prepared in case the automaker cannot reach a deal with its debt holders to convert $28 billion US in current debt into equity in the company, and reach a deal on concessions with the United Auto Workers.
Members of U.S. President Barack Obama’s automotive task force are due to meet with GM this week, following meetings and conference calls last week.
One plan being suggested would see the “good” assets of GM quickly put into new company in the event of a bankruptcy filing. The remaining “bad” assets, including weak brands, factories and health-care obligations, would remain in the old GM and be liquidated over time.
The Times said new, “good” GM might require between $5 billion and $7 billion in financing from the U.S. government, while estimates say the remainder of GM ? the “bad” assets ? might need up to $70 billion US in government backing.
GM CEO Fritz Henderson has said a bankruptcy filing is a possibility, although the company has also said it would prefer to restructure without going to court. He said last week the company is preparing for either course.
“If we need to resort to bankruptcy, we have to do it quickly,? Henderson said last week in an interview with CBC.
