Treasury Unloads GM Stock

Bertel Schmitt
by Bertel Schmitt

Now that the GM share finally is trading a wee bit above its IPO price, The Treasury is eager to bail from the bailout. The government’s fiance department announced “plans to sell 30 million shares of General Motors Co common stock as part of its ongoing effort to wind down the government’s stake in the bailed-out automaker,” Reuters says.

On June 6, the formerly disgrace stock will rejoin the S&P 500, which usually provides a lift, because index funds must buy the stock. That’s when the gov’s shares will sold, along with 20 million shares of GM stock held by the UAW Retiree Medical Benefits Trust.

Nonetheless, the “government looks certain to end up billions of dollars in the hole on the cost of the bailout,” Reuters says.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href=""> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href=""> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Buickman Buickman on Jun 05, 2013

    the same banks are that stripped GM of cash and rinsed it thru bk are now taking it back. this is a scam of unprecedented proportions and the American Public is too stupid to realize how badly they are being fleeced. this bk was intentional. Red Ink Rick and his Board of Bystanders sold off everything possible then funneled the cash to the banks in pieces of hundreds of millions for "advice" on things like not buying Chrysler and Nissan. this crime of the century was lost on many if not most, but not by your friendly Buickman. I witnessed it, followed, predicted it, and now explaining it. too bad they are getting away with it. Wagoner belongs in prison along with Ebbers and Madoff.

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    • Jimbob457 Jimbob457 on Jun 10, 2013

      doctor olds, I know in my gut how you must feel. My own emotional loss in a similar situation was bad enough, but nothing compared to yours. I was a relatively young Chief Economist of a Fortune 500 company when it went off the rails and soon disappeared. As a senior staff guy, it was my f**king job to bring top management the (from my perspective) rather obvious bad news along with some ideas about what might be done. Everyone heard me out, and then just ignored me. Fortunately, I was young enough to survive and move on elsewhere. Imo. you and others like you would serve GM well by performing an intelligent post-mortem on the BK. Sounds to me like a Wall Street guy like ect might make a good advisor, if willing. No doubt others have done post mortems, but knowing what to do, and convincing the current management to do it are two different things. Your voice and those of others like you just might carry some weight.

  • SCE to AUX SCE to AUX on Jun 05, 2013

    No matter how high the losses to the taxpayer, there will always be some who say it was worth it.

    • Lorenzo Lorenzo on Jun 05, 2013

      But of course. There are always people who take the larger view and look at the impact of a major corporation going belly up and taking its employees, dealers and suppliers with them, the last taking out both other domestic automakers and foreign assembly plants, all as the economy is plunging into the worst financial meltdown since the great depression. Just because some people view the bailout as a simple money-in, money-out deal that has no other effects doesn't mean the others looking at the bigger picture are wrong.

  • BeyondBelief BeyondBelief on Jun 05, 2013

    I don't agree with the actions of the "fiance" department. Who is the government to say that dowries shouldn't contain large amounts of GM stock?

  • Doctor olds Doctor olds on Jun 10, 2013

    @ECT- I want to express my appreciation for your respectful approach and thoughtful, data driven points. Thank you! It sure beats reading that my head is up my @ss just because I worked for GM. Your points are well made, though the idea that GM does not have new leadership is not quite accurate. Whitacre and Akerson both came from outside the industry as well as some new board members. The leaders of Finance and Sales similarly came from outside GM. A third of all GM executives were purged in the bankruptcy reorg and the remaining others were shuffled. A good friend decided to retire from a very high level job rather than move from the city he wants to stay in. Some of these are things my connections let me know through social relationships, though the movement of the top leaders is public. You make excellent points about corporate cultures. Roger Smith acquired EDS, in large part, to inspire change in GM's culture decades ago. Just magnify the challenges of an enterprise as immense and far flung as GM compared to most companies by several orders of magnitude. @jimbob457- Thanks for the empathy. It is an on-going frustration to see "the word on the street", I should say "in the blogosphere" being disconnected from reality, sometimes flat contradicted by data. Thank you also for the respectful interchange. I love to debate, and strive to remain respectful. You and ect set examples to follow in this context! As for expert assistance in figuring out GM's problems, that has been going on for a long time! I once had a daunting assignment to understand why GM had recalls and help formulate action plans to change the way we did business. By that point, around the middle of the last decade, we had established a good set of systems to ensure product quality, and my main conclusion was that we had to intensely focus on the product performance in the field to identify and resolve all product problems quickly, and of course, institutionalize the learning. My exec director (I am not proud to have felt some schadenfreude when she was moved to a lower level with the BK shakeup!) did not receive it very well. We hired a former top Toyota executive for $1,000,000 a year who concluded exactly the same! As an aside, he said GM had brilliant people in a mediocre system, whereas Toyota has a brilliant system that can be effective with mediocre people. I mean no disrespect to anyone at Toyota by this, just repeating his words. In the months before I left, a single product failure would drive intensive work from wherever in the world the components or assemblies came. The intensity and urgency was amazing. I was glad to be in the role of driving the work rather than being the guy or gal who had to work all night to get the answers, usually at a supplier. Gotta stop, I could go on forever! Thanks for the discussion.

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    • Doctor olds Doctor olds on Jun 11, 2013

      @jimbob457- I agree with you. GM, through the years, offered a number of early retirement windows which gave incentive to retire or separate. It seems the more competent and prepared individuals leave while the less productive stay on. More recently, and unprecedented at GM, management had to select those who would be forced to retire or separate, though they would also accept volunteers. I agree that is a more functional way to do it, imho.