Government Motors No More: U.S. Treasury Sells Remaining GM Shares
Share Sale Lifts Cloud of Dependence from Public Perception
In a day awaited by General Motors management for years, GM today announced the U.S. Treasury's sale of its last remaining shares in the automaker, finally making the automaker fully independent from government control. In somewhat of a Catch-22 situation, GM's share price was depressed by the Treasury's stake, yet the lower share price prevented the Treasury from fully recouping its $49.5 billion investment. Most analysts expect the share price to go up now that it's free from government ownership.
A few days ago, the Ann Arbor, Michigan-based Center for Automotive Research estimated that the government bailout of GM prevented job loss, lost income, and lost tax revenue that would have far exceeded the government investment in the company. On its face, the Treasury is estimated to have lost $10 billion on the GM bailout, based on the current share price.
GM CEO Dan Akerson said in a statement, "We will always be grateful for the second chance extended to us, and we are doing our best to make the most of it."
The end of government ownership is expected to particularly help truck sales, with truck buyers being especially sensitive to the government bailout issue. Over most of 2013, the sales gains of GM trucks have been more muted than that of the Ford F-Series and Ram full-size truck models.