Traverse City Record-Eagle

Business

November 22, 2013

Gov't wants to finish GM stock sales by end of year

DETROIT (AP) — The U.S. government expects to sell the last of its stake in General Motors by the end of the year, bringing an end to a sad chapter in the 105-year-old auto giant’s history.

The Treasury Department, in a statement issued Thursday, said it still owns 31.1 million shares of the auto giant, less than 2 percent. It plans to sell them by Dec. 31, as long as the price holds up.

Shares of GM briefly hit $39 in trading early Thursday. They pulled back a bit by midday, but still were up 76 cents, or 2 percent, to $38.45. The shares have gained 34 percent this year.

The government received 912 million shares in exchange for a $49.5 billion bailout during the financial crisis in 2008 and 2009. So far it has recovered $38.4 billion of the money, but selling the remaining shares at Wednesday’s $37.69 closing price gets the government $1.17 billion, leaving taxpayers short by roughly $10 billion.

The government says the bailouts of GM and Chrysler were needed five years ago to save the American auto industry and more than a million jobs. It never expected to get all of the money back.

“Had we not acted to support the automotive industry, the cost to the country would have been substantial — in terms of lost jobs, lost tax revenue, reduced economic production and other consequences,” Deputy Assistant Treasury Secretary Tim Bowler said in the statement.

The lack of government ownership should boost GM’s car and truck sales, North American President Mark Reuss said Wednesday at the Los Angeles Auto Show. GM was tagged with the derisive moniker “Government Motors,” and, at least initially, taking aid from the taxpayers kept some buyers away from GM vehicles. But company research later showed that subsided.

Taxpayers’ initially got a 61 percent stake in GM in exchange for the bailout, which was needed because GM nearly ran out of cash and may have faced liquidation. Treasury gradually has sold off its stake since a November 2010 initial public offering. The Canadian government, which also took part in the bailout, still owns about 8 percent of GM stock.

Text Only

the BIZ

AP Video
Robot Parking Valet Creates Stress-free Travel Raw: MH17 Bodies Arrive in Netherlands Raw: Fight Breaks Out in Ukraine Parliament Disabled Veterans Memorial Nearing Completion Last Mass Lynching in U.S. Remains Unsolved Home-sharing Programs Help Seniors Ex-NYC Mayor: US Should Allow Flights to Israel Clinton: "AIDS-Free Generation Within Our Reach" Judge Ponders Overturning Colo. Gay Marriage Ban Airlines Halt Travel to Israel Amid Violence VA Nominee McDonald Goes Before Congress US Official: Most Migrant Children to Be Removed Police Probing Brooklyn Bridge Flag Switch CDC Head Concerned About a Post-antibiotic Era Courts Conflicted Over Healthcare Law Raw: Truck, Train Crash Leads to Fireball
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide