facebooktwitterRSS
- Advertisement -
  • Most Commentedmost commented up
  • Most Emailedmost emailed up
  • Popularmost popular up
- Advertisement -
 

« News Home

Government sells remaining stake in GM



Published: Tue, December 10, 2013 @ 12:00 a.m.

By TOM KRISHER

AP Auto Writer

DETROIT

The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.

The Treasury Department sold its final shares of the Detroit auto giant on Monday, recovering $39 billion of the $49.5 billion it spent to save the dying automaker at the height of the financial crisis five years ago.

Without the bailout, the country would have lost more than a million jobs, and the economy could have slipped from recession into a depression, Treasury Secretary Jacob Lew said on a conference call with reporters.

Now, the American auto industry is back, President Barack Obama said in a statement. “Some of the most high-tech, fuel-efficient cars in the world are once again designed, engineered, and built right here in America — and the rest of the world is buying more of them than ever before,” he said.

The government received 912 million GM shares, or a 60.8 percent stake, in exchange for the bailout in 2008 and 2009. It began selling shares once GM went public again in November of 2010, and the pace picked up this year as the stock rose more than 40 percent. Last month, the government said it expected to sell its remaining 2 percent stake by the end of the year.

Earlier Monday, Mark Reuss, GM’s North American president, told reporters in Warren, Mich., that a government exit would boost sales, especially among pickup truck buyers. GM has said repeatedly that some potential customers have stayed away from its brands because they object to the government intervening in a private company’s finances. Because of the bailout, GM had been tagged with the derisive nickname “Government Motors.”

“We will always be grateful for the second chance extended to us, and we are doing our best to make the most of it,” GM Chairman and CEO Dan Akerson said.

During the conference call, treasury officials shrugged off a question about whether GM should have been required to pay more because it has a large cash stockpile, saying that the bulk of the bailout money was converted to GM stock. Not doing the bailout would have cost the government more than it lost in missed tax revenue and payments for unemployment benefits and pensions, the officials said.

The company now is sitting on $26.8 billion in cash and is considering restoration of a dividend.

GM went through bankruptcy protection in 2009 and was cleansed of most of its huge debt, while stockholders lost their investments. Since leaving bankruptcy, GM has been profitable for 15-straight quarters, racking up almost $20 billion in net income on strong new products and rising sales in North America and China. It also has invested $8.8 billion in U.S. facilities and has added about 3,000 workers, bringing U.S. employment to 80,000.


Comments

1commoncitizen(961 comments)posted 10 months, 2 weeks ago

How is it "justified" to loose $10.5 BILLION of the taxpayers money and sell the stock before it reaches an amount, at least equal to, a break even point. WHY did the government need to sell the stock NOW?
If GM has $26.8 BILLION in cash --let them buy the stock back!!!
What a scam this was to help the union(s) get a share of GM.
Why not give Ford $10.5 billion to "even the playing filed" (and all of the other auto manufactures in the country)??

Suggest removal:

2Silence_Dogood(1353 comments)posted 10 months, 2 weeks ago

Never again will I buy a GM product.

Suggest removal:


News
Opinion
Entertainment
Sports
Marketplace
Classifieds
Records
Discussions
Community
Help
Forms
Neighbors

HomeTerms of UsePrivacy StatementAdvertiseStaff DirectoryHelp
© 2014 Vindy.com. All rights reserved. A service of The Vindicator.
107 Vindicator Square. Youngstown, OH 44503

Phone Main: 330.747.1471 • Interactive Advertising: 330.740.2955 • Classified Advertising: 330.746.6565
Sponsored Links: Vindy Wheels | Vindy Jobs | Vindy Homes | Pittsburgh International Airport