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GM starts to pay state aid back early

AILING US car giant General Motors (GM) yesterday said it would start repaying $6.7bn (&pound;4bn) in government bailout loans, as it reported a smaller than expected $1.2bn loss for the three months to the end of September.<br /><br />In its first set of results since emerging from bankruptcy in July, the owner of Opel and Vauxhall said it would begin paying off the state aid with a $1.2bn repayment in December, much earlier than originally hoped.<br /><br />Sales at the&nbsp; so-called &ldquo;New GM&rdquo;, which was slimmed down following bankruptcy, fell by 26 per cent to $28bn. <br /><br />Meanwhile, chief executive Fritz Henderson raised hopes for the future of threatened jobs at its British arm Vauxhall, after he heaped praise on one of its UK factories.<br /><br />He said the group&rsquo;s plant in Ellesmere Port on Merseyside, which makes the Vauxhall Astra and employs more than 2,100 people, was &ldquo;extremely efficient&rdquo;.<br /><br />&ldquo;I feel very good about the plant,&rdquo; he added.<br /><br />GM shocked the industry and unions when it said earlier this month it was ditching a plan to sell GM&rsquo;s European operations, which include Vauxhall in the UK and Opel in Germany, to Canadian car part maker Magna International. <br /><br />Despite the decision to axe the Magna deal, trade unions still fear GM may axe thousands of jobs in the UK, where GM employs about 5,000 people in total.<br /><br />The maker of American cars like Chevrolet, Cadillac and Buick, also said that it had started repaying a &euro;900m bridging loan to the German government.<br /><br />The New GM has cut 34,000 jobs globally from the start of the year, eliminated $78bn of debt and built up a cash hoard of almost $43bn thanks to its bailout. It has also cut its US inventories of unsold vehicles in half.<br /><br />&ldquo;They are still on life support as a business and they are going to continue to be,&rdquo; said Mirko Mikelic, a portfolio manager at Fifth Third Bank.