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
US Government Sells GM Stake, Loses $10.5B
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)

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. (More General Motors stories.)

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