That’s right… the Federal government plans to sell off the rest of the GM stock they own at a $10 Billion loss to the American taxpayer. The sale and announcement to come on a Friday where many in Washington will be heading out for the holiday and many Americans won’t notice. Why you ask… It seems they said they need the money for things they need to do.
In the real world, people and companies buy low and sell high, but in order to fulfill their failing agenda, the administration has directed the U.S. Treasury to sell their GM stock now. Gotta pay for more ObamaCare commercials and God only knows what else.
Sounds like another screw job coming and going, America!!
Mark Reuss, president of General Motors Corp’s North America unit, is shown at the Los Angeles Auto Show in Los Angeles on Wednesday. The U.S. government wants to sell its GM stock by yearend. (Photo: Chris Carlson/Associated Press) Associated Press Posted: Nov 21, 2013 2:54 PM ET Last Updated: Nov 21, 2013 2:54 PM ET
Hmmm… Once stock is sold, limits come off executive pay
CBC: The U.S. government expects to sell the last of its stake in General Motors by the end of the year, bringing an end to a sad chapter in the 105-year-old auto giant’s history.
The Treasury Department, in a statement issued Thursday, said it still owns 31.1 million shares of the auto giant, less than two per cent. It plans to sell them by Dec. 31, as long as the price holds up.
Shares of GM briefly hit $39 US in trading early Thursday. They pulled back a bit by midday, but still were up 76 cents, or two per cent, to $38.45. The shares have gained 34 per cent 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.
‘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
Canadian finance minister Jim Flaherty has also signalled his intention to sell Canada’s shares in GM “as quickly as feasible.” The Canadian and Ontario government sold 30 million shares, valued at $1.1 billion, in September and have another 38 million to sell.
The U.S. 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.
Dubbed ‘Government Motors’
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 per cent 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 per cent of GM stock.
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.
Came out of bankruptcy
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.