by Burke Speaker | December 10, 2013 10:27 am
The US government has sold its last shares in General Motors (GM) stock — formally ending the US government bailout of the automaker.
The government sold its remaining 31 million shares after starting with 500 million in 2010.
In all, taxpayers lost $10.5 billion on the auto industry bailout (via USA Today).
The Treasury department said it recovered $39 billion from selling its GM stake, and had put $49.5 billion of taxpayer money directly into the GM bailout.
The total bailout rises to $51 billion, including another $1.5 billion that Treasury put into programs to keep GM suppliers afloat and to make sure owners’ warranties were honored, plus some into the old GMAC finance company that’s now known as Ally — separate from a much larger Ally bailout.
GM shares closed today at a record $40.90, up 73 cents or 1.8%. The Treasury announcement came after markets closed, and the impending exit, which Treasury has said would come by the end of the year, might have nothing to do with the advancing share price.
The sale by the US government of its shares was not expected to make that much of a splash as most knew it was coming. “People have been factoring this in for awhile,” GM CFO Daniel Ammann said in an interview.
The loss in shares, US government officials note, had far less on an impact than letting GM fail.
“Inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production,” US Treasury Secretary Jacob Lew said in a statement.
President Obama also added that the impact of preserving GM was significant.
“Some of the most high-tech, fuel-efficient cars in the world are once again designed, engineered, and built right here in America — and the rest of the world is buying more of them than ever before,” he said.
It’s also important to note that the bailout was estimated to have saved some 1.2 million American jobs.
Additionally, a new study today by the Center for Automotive Research stated that the federal rescue of GM preserved $34.9 billion in tax revenue.
While many investors and analysts had expected that GM would start issuing dividend payments on the shares, GM has yet to announce if this will happen.
Of course, with the bailout now officially over, GM can begin paying its execs however it wants — after being limited in exec pay by the bailout rules.
GM stock is up 5.8% in the past week and General Motors stock is up 42% year to date.
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