Former GM CEO Ed Whitacre Urges Treasury To Sell Its Stake
Ed Whitacre, the former CEO of General Motors in the post-bailout era, penned an op-ed in the Wall Street Journal urging the U.S. Treasury to sell its shares in General Motors “as quickly as possible”.
The crux of Whitacre’s argument seems to rest on eliminating beauracracy rather than overriding political or economic concerns. Whitacre writes that
“The government’s authority over GM today isn’t concentrated in the 500,000 shares it still owns, which amount to a hefty but not controlling 26.5% ownership stake. Rather, Washington’s power comes from the management apparatus of TARP, the Troubled Asset Relief Program, from which the $50 billion bailout originally came. TARP is funded by taxpayers, so there are many rules about how that money can and can’t be used. The result: GM spends an awful lot of time checking in with the people who administer TARP over everything from hiring to executive compensation and management. For a global company, that adds up to a lot of distraction.”
You can read the whole piece here. As one commenter so eloquently says, I’ll be sitting back with a big bag of popcorn…
More by Derek Kreindler
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But, Ed, didn't you told me that GM already paid the government back? I don't blame the Treasury for not wanting to sell. Of course, with that chump Akerson in charge, the stock price is going nowhere but down. GM just wants off easy. Typical. In a just world, GM would have to foot the bill for whatever the government loses on the stock sale. Doubt that will happen. People admired Iacocca for paying Chrysler's loans back early. People hate GM and the stooges that run it because they continue to pull crap like this.
The government taking a visible loss on GM two months before the presidential election? It is not going to happen. Whitacre must know this. I doubt the US government will ever take a loss on GM. If GM stock doesn't recover to parity the government will keep owning GM right down to a 2nd bankruptcy. Then all the money will be lost, but at least Washington did not have to make any decisions or take any risks about selling in time.
Would it be legal for the Federal government to buy a controlling share in GM?
Can we officially start the countdown to the next GM bankruptcy?