U.S. Treasury Continues Sell-Off of GM Shares, UAW Sells Warrants

TTAC Staff
by TTAC Staff
u s treasury continues sell off of gm shares uaw sells warrants

Continuing its divestment of the shares it obtained in General Motors for bailing out the automaker in 2009, the United States Treasury told Congress yesterday that it has sold $876.9 million dollars worth of GM stock last month, somewhere between 23 and 26 million shares, based on the trading prices during July. By those calculations, the U.S. government still holds about 136 million shares of GM, which closed yesterday at $35.98. At the rate that Treasury is selling off its GM shares, the government’s equity will be completely divested by early 2014. The government originally held a 61% stake in GM following the $49.5 billion bailout, over 500 million shares. By selling some of those shares, Treasury has recouped $34.6 billion of the $49.5 billion.

Also yesterday, the UAW’s health care trust finalized it’s sale of 45.4 million warrants that allow the holder to buy GM stock at a price of $42.31 before the end of 2015. The warrants were sold for $171 milion. According to the Detroit News’ David Shepardson, they were sold in a “modified Dutch auction” and can now be purchased on the open market. Shepardson told TTAC that large institutional investors were the likely buyers. At the offered price of $3.85 per warrent, GM stock would have to rise over $12 a share from its current price for it to be profitable should the purchasers exercise their rights. Since the UAW had no problem selling the warrants, it stands to reason that at least some of those large investors think that GM, or buying the warrants, which can be traded, is a good bet.

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  • Pch101 Pch101 on Aug 14, 2013

    I've learned something from this thread, namely that allowing anonymous Aussies on the internet to manage US policy would be a very bad idea.

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    • Big Al from Oz Big Al from Oz on Aug 15, 2013

      @Pch 101 Very uneducated of you. Australia pays more tariffs, on what? We don't have a 25% tax on half of our vehicle market to protect our manufacturers. We don't have barriers that are an effective 26% tax on vehicle imports. We don't stop grey imports. We have a 5% tax on every imported vehicle. We don't even stop US imports, or even Euro/Asian or what ever. Really, what crap you write. What is reducing Australia's competitiveness is wages. The cost of manufacture. 12% of Australia's GDP is manufacturing. About the same as the US. As for the money that flows into our auto industry. I have the same views of this as I do towards any subsidisation. I don't support it. I do know you would have read my comments recently on the Australia auto industry. Give them nothing. If they can't compete then they are costing someone. I do realise most who post on this site, including myself admire automobiles. But not at the expense of people and countries. Being nostalgic and emotive will not allow you to make a logical judgement. That's how I view your comment. Some forms of manufacturing are becoming low tech. Motor vehicles are starting to fit into that group. Any automotive manufacturer can set up a factory in any country and produce, sort of like farming. The world is becoming more competitive and the further you stick you heads in the sand the harder it will be to pull them out.

  • April April on Aug 14, 2013

    For those against the federal help of GM and Chrysler. Unless you have a Wayback machine that the planet will fit inside... Get over it.

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    • Big Al from Oz Big Al from Oz on Aug 15, 2013

      @J.Emerson I didn't state purely tariffs. Google technical trade barriers. The US has created a market that most think is what the US only wants. This was created by technical barriers as well as tariffs. Why is it that the new Colorado which is a fantastic pickup needs to be redsigned for the US market? There is much information of this subject. I can foresee a battle just like the VHS vs Beta for vehicle standardisation. The US will lose out because the rest of the globe is mainly aligning to the UNECE in regard vehicle harmonisation. The US will be on its own. With differing regulations etc. Where is their export products? Pickups aren't what the globe wants, or for that matter even Mustangs and Corvette will not be large movers.

  • DenverMike DenverMike on Aug 14, 2013

    @BAF0 - Can you give specific examples of imports hit with a 53.5% tax? I've seen as much as 2.5%. Anything else is safety and other regulations related and all cars must meet these, including domestics. The costs of meeting regs is spread out across the platform's entire production run. If it's a niche vehicles, yeah it gets real expensive, but that's true of domestic niche vehicles too. Popular Japanese autos easily meet standards and regulations for 3 or more different markets with individual standards. It's a non issue if it's something that sells. Yeah, shocking. It takes money to make money.

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    • Pch101 Pch101 on Aug 15, 2013

      @highdesertcat "How can a 25% tariff not effect trade." A high tax on a product that nobody wants is irrelevant. There are five makers of large pickups in the world, and they all build in NAFTA. The medium truck market is dead. Toyota and Dodge both abandoned it. The compact truck market is on the slide and not likely to recover, due to the changing nature of demand. I'm sorry that the dreams of a strong Holden didn't work out for you. The world is largely uninterested in Australian vehicle exports, no matter what Tony Abbott tells you.

  • Doctor olds Doctor olds on Aug 15, 2013

    The "truck" definition for CAFE represents about 1/2 the US market, the majority of which are passenger vehicles. The "truck" definition for the light truck tariff represents 11% of the market. The tariff does not apply to a vehicle assembled (including CKD) anywhere in NAFTA. GM Australia (Holden's) share of GM can be summarized: Holden employs 2.3%, sells 1.2% and builds 0.6% The operation loses a huge sum relative to its size despite massive and on-going government assistance. It has no chance to stand on its own as anything more than a sales organization.

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    • Doctor olds Doctor olds on Aug 15, 2013

      @Big Al from Oz As I have written repeatedly, and you must know as well: The Chicken tax applies to light trucks that are not primarily for carrying passengers. Pickup trucks comprise about 11% of US new vehicle sales. The rest of the CAFE "Truck" segment consists of SUV, CUVs and Minivans which do not have the tax because they are primarily for carrying passengers. The Ford Transit Connect circumvention of the tax by simple installation of a rear seat is evidence of this. Passenger vehicles imported from outside of NAFTA have just a 2.5% tax. Japanese cars are often sold for less in America than their pricing at home to meet competition. Why do you think a Holden Commodore costs you $50,000 while the Chevy SS will sell for far less here? The door is open. All that is necessary to enter is to be good enough. I agree the tax should go, always have, always will. I present facts and use logic to reach conclusions. Anyone in business, especially the most complex and expensive of consumer products- motor vehicles- has to let data and facts inform them, not preconceptions and emotion. Facts. A fair analysis of the facts strongly supports the competitiveness and open nature of the NA market.