Only in the topsy-turvy world of the U.S. auto industry could General Motors' reported loss of $1.15 billion in the third quarter, when it entered bankruptcy, be seen as good news. But good news it is, as the government-owned Detroit automaker promises to pay back $6.7 billion to the government more than five years ahead of schedule. GM hopes to pay down the loan, which they received for bankruptcy proceedings, at a rate of roughly $1 billion per quarter.

Analysts are pleased about improving sales, but have noted many blemishes in GM's enthusiastic press. The company is still bleeding cash, and prospects for earning back the govermnent's $50 billion "investment" are grim. Moreover, skeptics think the payback promise is really an attempt to forestall criticism of the automaker's use of taxpayer money to boost investment in Europe. Here's the catch:

  • Cash Flow Still Negative, writes Mickey Maynard of the New York Times in her Twitter feed. Maynard reports on the auto industry from Detroit, and attended this morning's press conference with GM. She says that the figures are "new territory" that "show how bankruptcy can cleanse a [balance] sheet." But she notes that GM's continued negative cash flow "(spending out of reserves) is a concern for analysts; auto industry won't recover until it's positive"
  • A PR Move to Deflect Criticism, says Edward Harrison at Credit Writedowns.  Harrison suggests that GM needs to boost its sales to survive. In order to do this, it requires investing in Europe on the American taxpayers dime. "However, [GM] knows that its desire to use these funds to stabilize the European business is likely to invite populist outcries in North America. This is why they have announced the repayment schedule today; it is purely a public relations maneuver to quell any anti-bailout sentiment. They are repaying German state aid for similar reasons, but also because it gives them greater flexibility in making operating decisions about job cuts and plant closures."
  • Rivals Doing Better, says Chris Isidore at CNN Money. "By way of comparison, two of GM's top rivals -- Ford Motor (F, Fortune 500) and Toyota Motor (TM) -- reported unexpected quarterly profits during the third quarter. Still, GM's third-quarter loss was smaller than the $2.5 billion the company lost from continuing operations in the third quarter of 2008. But comparisons to last year are difficult since much of what was GM a year ago was shed during the bankruptcy process."
  • Good News in China, Bad News at Home, argues Douglas A. McIntyre at 24/7 Wal St. "GM still has to overcome low sales in the US and Europe. It has decided to keep its European operations including Vauxhall and Opel. It will turn to several EU governments to help fund a refinancing of these units, but some of the capital will almost certainly have to come from GM itself. That raises the uncomfortable question of why US taxpayer money is being sent overseas." Yet he attributes success to shrinking costs under bankruptcy, and "the company's remarkably successful business in China which is growing at a rate of over 60%. GM car unit sales in China last month almost matched those in the US. GM and VW are now the largest auto firms on the mainland."
  • Little Progress on U.S. Jobs, Green Cars, notes Michael Corkery at the Wall Street Journal. "The government's goals for the new GM-which were either implicit or explicit in the bailout funds-include expanding its work force in the U.S. and building smaller, more fuel-efficient cars...It is worth noting how much progress GM made toward it in the third quarter. The short answer: Not much." He says the pursuit of profitability is understandable for now, but "if GM doesn't start making moves to bolster its long-term sustainability, especially in the U.S., already skeptical taxpayers may start to wonder what was the point of owning a car company anyways."