By on December 10, 2013

gmstock

It’s official: the United States government has sold off its remaining $49.5 billion investment in General Motors.

U.S. Treasury Secretary Jack Lew announced that of the aforementioned investment — made during the fallout of the Great Recession — $39 billion came back to the government’s coffers while the taxpayer lost $10.5 billion on the deal. The government originally received 912 million shares — or 60.8 percent total ownership — in exchange for saving the automaker from certain doom in 2008. Once the company regained its footing in November 2010, the government began selling shares in a divestiture that lasted until this afternoon, when only 2 percent remained of GM remained in the federal investment portfolio.

On the other side, GM’s stock rose to $41.17 during regular trading hours, the highest peak the stock has seen since their IPO debuted in 2010. The automaker currently sits upon a nest egg of $26.8 billion in cash, and is considering bringing back dividends to their stockholders. Most of the nest egg was built during 15 consecutive months of profitability based on the strength of their brand and rising sales in North America and China.

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39 Comments on “U.S. Government Sells Remaining General Motors Stock...”


  • avatar
    Detroit-X

    “The automaker currently sits upon a nest egg of $26.8 billion in cash, … Most of the nest egg was built during 15 consecutive months of profitability based on the strength of their brand and rising sales in North America and China.”

    Not losing the $35B in tax loss carry-forwards certainly helped too; I understand that normally in bankruptcies, that is gone. Overall, I the government spend the recovered and lost money well for a change, unlike several overseas wars and actions I could mention.

    • 0 avatar
      doctor olds

      @Detroit-X The carry-forwards were not unprecedented, and more importantly, were a small fraction of the pension obligations New GM took on instead of bankrupting the PBGC, backstopped, of course, by taxpayers!

    • 0 avatar
      Aaron2013

      oh please, the bailout of GM and Chrysler were cynical payola to reliable democrat voters. at least in the two wars you speak of, there was bipartisan agreement that they were necessary for national security.

      Chrysler and GM made cruddy products. That’s the primary reason why they went bankrupt. They showed contempt for their customers for decades. that’s the second most important reason for the bankruptcy. Stupid labor agreements hurt, but even great labor agreements wouldn’t have saved them when they routinely turned out shoddy products (Aztec, for example).

  • avatar

    I wish I could say I see a bright side to all of this, but I recently tested a new Chevy SS…

    Look on the bright side: the $10 billion loss will be paid for by the tax payers and not a dime of it will come out of the pockets of the congress!

  • avatar
    PCP

    …the taxpayer lost $10.5 billion on the deal
    The automaker currently sits upon a nest egg of $26.8 billion in cash…

    Hmmm – how much does it hurt when you sit down?

    • 0 avatar
      APaGttH

      Or, as a taxpayer, I could have been on the hook for the bankrupt GM pensions and the loss of close to $40 billion in taxes collected.

      When you look at the bigger picture, the $10.5 billionish loss compared to the total ROI – the bailout was a bargain. Two different Presidential administrations saw it necessary – GM is undeniably more healthy and with better products than before.

    • 0 avatar
      thelaine

      Look, we lost the same amount of money we gave away to the UAW. Funny how that worked out. Could have done the whole GM bailout and not lost any money if not for the UAW giveaway. So, the argument that we needed to lose this money or lose GM is wrong.

  • avatar
    Dave M.

    I’d like to think they’ll pay it back, immediately after Wall St. does. Yeah right.

    06-01-09: Never forget!

  • avatar
    E46M3_333

    They just kicked the can down the road a few years.
    .
    .

  • avatar
    doctor olds

    The real bottom line:

    http://www.autonews.com/article/20131209/OEM/131209870/study-gm-chrysler-bailouts-generated-8-to-1-savings#axzz2n1zx4wNp

    • 0 avatar
      henkdevries

      Really? And what happens next time?
      Perhaps a bailout fund should be made from the tax income generated by GM’s economic activities. We earn some on GM this year and we lose some other years.

    • 0 avatar
      Aaron2013

      that’s not the real bottom line, that’s the democrat party line. You link to an article with no facts, data, or statistics that promotes a study by a biased, pro-bailout group. That’s nothing but propaganda. what exactly are you a doctor if, Dr.-extinct-shoddy-car-brand?

    • 0 avatar
      Lou_BC

      @doctor olds – 40% of the funding for the organization that produced the data you linked comes from state and federal grants.

  • avatar
    danio3834

    As a GM stock holder, this has been great news.

  • avatar
    SCE to AUX

    Not quite what I wanted, but better than I expected.

  • avatar
    jkross22

    I’m happy to see the government out of the business of being a stockowner, but without commitments to not save the “too big to fail” socialists, how will banks, automakers and any other industry that spends large sums of money lobbying not expect to bailed out again?

    • 0 avatar
      Aaron2013

      the government has induced moral hazard. Make risky credit default swaps and phony bundled mortgage securities? don’t worry, we’ll bail ya out! Make terrible cars, treat your customers with contempt, and make bad labor agreements? Don’t worry, we’ll bail you out!

  • avatar
    reclusive_in_nature

    Oh well, we’ll just print out the difference. What could go wrong?

  • avatar
    Aaron2013

    This is second only to the bank bailout in the biggest taxpayer ripoffs in history. This was payola to the unions, just like the bank bailout was payola to Wall Street.

    GM was losing money BEFORE the economy crashed. That speaks volumes about the contempt GM historically demonstrated to its customers and the gross incompetence of the company. We would ALL be better off if the two worst car companies that do business in North America – GM and Chrysler – went extinct. their few good products would have been bought up by one of the survivors, and their standard scheisse-mobiles would have gone to hell,where they belonged, without ripping off taxpayers and secured creditors.


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