Uncle Sam Will Lose Money on GM Bailout
Current stock prices show $11B loss
By Arden Dier, Newser Staff
Posted Jul 25, 2013 7:54 AM CDT
In this April 25, 2012 file photo, Chevrolet Sonics move down the line at the General Motors Orion Assembly plant in Orion Township, Mich.   (AP Photo/Duane Burleson, File)

(Newser) – Hoping Uncle Sam will break even on the General Motors bailout? You might just have to keep on hoping. GM stock needs to sell at $95.51 per share for that to happen and that's three times the current price—even after a 25% climb this year—NBC News reports. "There’s no question that Treasury, the taxpayers, are going to lose money on the GM investment," a special inspector tells the AP, as industry analysts warn there's no sign that GM stock could even come close to the point of paying back the federal coffers.

Washington began selling off GM stock—it got 61% of the company in the $50 billion bailout—in 2010 for around $33 a share. Though last month the government was down to 189 million shares, or 14%, the goal is to be out of the car business by April 2014. And while the rising stock prices may reduce the damage, current prices would hand the White House just $6.9 million, with a loss of around $11.2 billion. That's no small number when compared with the Chrysler bailout, which cost taxpayers $2.9 billion, the AP notes.

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Showing 3 of 101 comments
Holly Williams
Jul 27, 2013 7:28 PM CDT
I am really tired of the corporate welfare that occurs in our nation. I mean, the government has no business bailing these companies out. If they can't keep afloat by themselves then let them sink!
right2dave
Jul 27, 2013 8:00 AM CDT
If they can't turn a profit then they can't compete. Bailout was to buy votes anyway.
OCMike
Jul 26, 2013 4:29 PM CDT
As long as both parties have a "too big to fail" attitude, there will be little incentive for private industry to punish incompetence at the top. Yes, some people would have suffered if Citigroup, GM, etc. had had to face the consequences of their actions. But that happens in the real world. If a child touches a bioling tea kettle, he gets hurt. Bush and Obama both want capitalism without risks. That's not a free market, that's neo-feudalism. Even if one is going to argue that the government "had to do it" then they should have found the funds for the bailouts from cuts to other programs. Instead, we put it on the government credit card. It helps a lot if you have a connection Hank Paulson or Timothy Geithner.