US Government Sells GM Stake, Loses $10.5B
Treasury secretary says bailout saved a million jobs
By Newser Editors and Wire Services
Posted Dec 9, 2013 3:30 PM CST
Updated Dec 9, 2013 4:30 PM CST
In this Thursday, Jan. 10, 2013 file photo, the logo for General Motors decorates the entrance to a former UPS facility in Roswell, Ga.   (AP Photo/David Goldman, File)

(Newser) – The US government ended up losing $10.5 billion on its bailout of General Motors, but still says the alternative would have been much worse. Treasury Secretary Jacob Lew announced today that the government sold its remaining shares in the Detroit automaker. The government received 912 million GM shares, or a 60.8% stake, in exchange for a $49.5 billion bailout during the financial crisis in 2008 and 2009. It recovered $39 billion of the money, meaning taxpayers came up more than $10 billion short. But Lew says the rescue was necessary to save a million jobs and stop the American auto industry from collapsing.

GM shares rose 1.2% in after-hours trading following the announcement and at one point in regular trading reached $41.17, the highest level since GM returned to the markets with a November 2010 initial public offering. Earlier today, Mark Reuss, GM's North American president, told reporters in Warren, Mich., that a government exit would boost sales, especially among pickup truck buyers. GM has said repeatedly that some potential customers have stayed away because the government intervened in a private company's finances. Since going through bankruptcy, GM has been profitable for 15 straight quarters and invested $8.8 billion in US facilities, adding about 3,000 workers.

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TheJman
Dec 10, 2013 7:56 PM CST
Worst part is GM is currently sitting on about 25 billion in profits. They should be paying us back. This was nothing more than Obama saving his union voters.
NorCalHal
Dec 10, 2013 5:37 PM CST
NO BAILOUT WITH TAXPAYER MONEY WAS REQUIRED ! ! ! ! ! ! The United States has been down this road before with Lockheed Aircraft, Trans World Airlines, Chrysler and others. Instead of GIVING them taxpayer money they should have either; 1) Let the company be sold in bankruptcy. There would have been dozens of willing buyers. It would have reduced or eliminated their debt and the new company would have been stronger than ever. In fact my local GM dealer told me he wishes that the administration had let the bankruptcy occur. Few, if any, jobs would have been lost - with the possible exception of the top GM execs which should have lost their jobs! or 2) They could have done what they did for Lockheed, Chrysler and I believe TWA, that is a "loan guarantee" where the U.S. guaranties a commercial BANK loan, meaning that if the company defaults and fails to repay the loan the government will pay the difference or shortfall... In the loan guaranty senario NO tax payer money is fronted and we would not now be selling stock at a $ 10.5 BILLION dollar loss! In the loan guaranties the feds have done they not only DID NOT lose any money. In FACT they MADE money on the interest and the companies survived ! It is not a question of saving jobs. The jobs would have remained under either of the above options. The difference would have been that the BANKS would not now have $ 10.5 BILLION of OUR tax money and GM not required to repay it.. This was more about giving the banks money and Union payback than it was saving GM.
Norman Johnson
Dec 10, 2013 3:38 PM CST
Well people can critiscize the US govt. bailout of GM all they want,but they weren't the only company that needed bailout funds.And lest we forget, these car companies were the "Arsenal of Democracy" during the war years of the '40's and '50's.When the country needed them to build planes and tanks and troop transport trucks and jeeps, they were there , and if they hadn't been, the Nazi's would've won, and we'd be speaking German,what few of us left living after the resulting genocides.I'm sure the American people can get generous rebates on their car purchases to compensate for the taxdollars used in the bailouts.Foreign car companies don't give rebates.