GM withdraws application for U.S. government loans to modernize plants

Posted on January 27, 2011

WASHINGTON (AP) – General Motors says it is withdrawing its application for $14.4 billion in federal government loans it had sought to help modernize plants to build fuel-efficient cars.

GM says it doesn’t need the loans now because the company’s cash position has improved and it can pay for the improvements. GM applied for the loans in 2008 to modernize plants to build fuel-efficient vehicles.

The $25 billion low-interest loan program is administered by the U.S. Energy Department. It was created in a 2007 energy law to help car companies retool older factories to build green cars.

Ford Motor Co., Nissan and Tesla have benefited from the program. Chrysler Group is seeking loans under the program.