U.S. Treasury to Sell Remaining GM Stock by End of 2013
The stigma of being called “Government Motors” may soon come to an end for General Motors. The U.S. Treasury announced this week that it expects to sell its remaining 31.1 million shares of GM common stock by the end of the 2013. That, however, will only happen if the current average daily trading volumes remain stable. The U.S. Treasury also confirmed it had completed the sale of 70.2 million GM shares.
“While the U.S. Treasury’s equity stake draws to a close, our work to transform GM continues,” the automaker said in a statement. “We’re making great progress in our efforts to make the most of this second chance by building outstanding cars and trucks, creating jobs and reinvesting in our country.”
To date, the Treasury has recouped $38.4 billion of the $49.5 billion bailout given to GM at the height of the financial crisis in 2009. In its quarterly report to Congress last month, the Treasury announced that so far it had lost $9.7 billion on the bailout of GM.
“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," said Treasury Deputy Assistant Secretary Tim Bowler, in a release.
According to the Treasury, more than 340,000 new auto jobs have been created since the 2009 bankruptcies of GM and Chrysler and all three Detroit automakers are now profitable. GM stock is currently trading at just under $38 a share.
While the U.S. Treasury continues to sell off GM stock, the Canadian government is holding on to the majority of its stock in hopes to recoup more of its $10 billion bailout to the automaker. Once the U.S. Treasury sells off the rest of its GM stock, the automaker may be able to buy back some of the stock owned by the Canadian government.