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 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.
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Once the U.S. government exits, GM will be free of restrictions on
executive pay that came with the bailout. CEO Dan Akerson has
complained that the restrictions have hurt GM's ability to recruit
executives.
GM went through bankruptcy protection and was cleansed of most of
its huge debt, while stockholders lost their investments. Since
leaving bankruptcy in 2009, GM has been profitable for 15 straight
quarters, racking up almost $20 billion in net income on strong new
products and rising sales in North America and China. It also has
invested $8.8 billion in U.S. facilities and has added about 3,000
workers, bringing U.S. employment to 80,000.
The company now is sitting on $26.8 billion in cash and is
considering restoration of a dividend. It hasn't paid U.S. federal
income taxes since leaving bankruptcy due to write-offs from
accumulated net losses.
[Associated
Press; TOM KRISHER, AP Auto Writer]
Associated Press Writer
Justin Pritchard contributed from Los Angeles.
Copyright 2013 The Associated
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