It’s official: the United States government has sold off its remaining $49.5 billion investment in General Motors.
U.S. Treasury Secretary Jack Lew announced that of the aforementioned investment — made during the fallout of the Great Recession — $39 billion came back to the government’s coffers while the taxpayer lost $10.5 billion on the deal. The government originally received 912 million shares — or 60.8 percent total ownership — in exchange for saving the automaker from certain doom in 2008. Once the company regained its footing in November 2010, the government began selling shares in a divestiture that lasted until this afternoon, when only 2 percent remained of GM remained in the federal investment portfolio.
On the other side, GM’s stock rose to $41.17 during regular trading hours, the highest peak the stock has seen since their IPO debuted in 2010. The automaker currently sits upon a nest egg of $26.8 billion in cash, and is considering bringing back dividends to their stockholders. Most of the nest egg was built during 15 consecutive months of profitability based on the strength of their brand and rising sales in North America and China.
Photo credit: Ray Dumas/Flickr/CC BY-SA 2.0
“The automaker currently sits upon a nest egg of $26.8 billion in cash, … Most of the nest egg was built during 15 consecutive months of profitability based on the strength of their brand and rising sales in North America and China.”
Not losing the $35B in tax loss carry-forwards certainly helped too; I understand that normally in bankruptcies, that is gone. Overall, I the government spend the recovered and lost money well for a change, unlike several overseas wars and actions I could mention.
@Detroit-X The carry-forwards were not unprecedented, and more importantly, were a small fraction of the pension obligations New GM took on instead of bankrupting the PBGC, backstopped, of course, by taxpayers!
oh please, the bailout of GM and Chrysler were cynical payola to reliable democrat voters. at least in the two wars you speak of, there was bipartisan agreement that they were necessary for national security.
Chrysler and GM made cruddy products. That’s the primary reason why they went bankrupt. They showed contempt for their customers for decades. that’s the second most important reason for the bankruptcy. Stupid labor agreements hurt, but even great labor agreements wouldn’t have saved them when they routinely turned out shoddy products (Aztec, for example).
I wish I could say I see a bright side to all of this, but I recently tested a new Chevy SS…
Look on the bright side: the $10 billion loss will be paid for by the tax payers and not a dime of it will come out of the pockets of the congress!
Not so.
To the extent members pay taxes, they’re not exempted.
So you don’t feel that the people who actually signed the bailouts (bridgeloans) should pay MORE out of THEIR OWN POCKET?
I guess their exemption from Obamacare is OK too?
And we devolve into Obamacare after just 13 B&B comments.
Should have been fewer.
And we devolve into Obamacare after just 13 comments.
How would we know? Folks like Reid refuse to make their tax returns public even when asked to do so.
And there is a report of problems with connecting rod bearings in their 4 cylinder engines. They just may need that cash.
1 bright side is that 10s of thousands of jobs were saved in a depression era economy. By extension communities weren’t ravaged, tax revenue was generated and Tiny Tim had 15 wonderful Christmases.
The government is there for the people, not to turn a profit, and here it did its job. Well done.
No, the government is there for some people. Ask any of the people who lost companies, jobs or homes in the recession that didn’t get bailed out.
The government isn’t god. It can’t help everyone. It has to be judicious in it’s decision as where to place it’s attention and resources.
To those with connections.
10’s of thousands of jobs were saved at the low, low price of hundreds of thousands of jobs. In theory, the government is there to uphold the Constitution, not “there for the people” who vote for the incumbent president.
If Rube Goldberg was asked to invent the most expensive way to “save” jobs, he couldn’t beat the GM and Chrysler bailouts.
…the taxpayer lost $10.5 billion on the deal
The automaker currently sits upon a nest egg of $26.8 billion in cash…
Hmmm – how much does it hurt when you sit down?
Or, as a taxpayer, I could have been on the hook for the bankrupt GM pensions and the loss of close to $40 billion in taxes collected.
When you look at the bigger picture, the $10.5 billionish loss compared to the total ROI – the bailout was a bargain. Two different Presidential administrations saw it necessary – GM is undeniably more healthy and with better products than before.
Look, we lost the same amount of money we gave away to the UAW. Funny how that worked out. Could have done the whole GM bailout and not lost any money if not for the UAW giveaway. So, the argument that we needed to lose this money or lose GM is wrong.
I’d like to think they’ll pay it back, immediately after Wall St. does. Yeah right.
06-01-09: Never forget!
They just kicked the can down the road a few years.
.
.
The real bottom line:
http://www.autonews.com/article/20131209/OEM/131209870/study-gm-chrysler-bailouts-generated-8-to-1-savings#axzz2n1zx4wNp
Really? And what happens next time?
Perhaps a bailout fund should be made from the tax income generated by GM’s economic activities. We earn some on GM this year and we lose some other years.
that’s not the real bottom line, that’s the democrat party line. You link to an article with no facts, data, or statistics that promotes a study by a biased, pro-bailout group. That’s nothing but propaganda. what exactly are you a doctor if, Dr.-extinct-shoddy-car-brand?
@doctor olds – 40% of the funding for the organization that produced the data you linked comes from state and federal grants.
Doc knows he’s shilling Lou. At least he openly admits his financial interest. Who can blame him for his point of view?
As a GM stock holder, this has been great news.
LOL. Pre-bankruptcy or post-bankruptcy stock holders?
Not quite what I wanted, but better than I expected.
I’m happy to see the government out of the business of being a stockowner, but without commitments to not save the “too big to fail” socialists, how will banks, automakers and any other industry that spends large sums of money lobbying not expect to bailed out again?
the government has induced moral hazard. Make risky credit default swaps and phony bundled mortgage securities? don’t worry, we’ll bail ya out! Make terrible cars, treat your customers with contempt, and make bad labor agreements? Don’t worry, we’ll bail you out!
Oh well, we’ll just print out the difference. What could go wrong?
This is second only to the bank bailout in the biggest taxpayer ripoffs in history. This was payola to the unions, just like the bank bailout was payola to Wall Street.
GM was losing money BEFORE the economy crashed. That speaks volumes about the contempt GM historically demonstrated to its customers and the gross incompetence of the company. We would ALL be better off if the two worst car companies that do business in North America – GM and Chrysler – went extinct. their few good products would have been bought up by one of the survivors, and their standard scheisse-mobiles would have gone to hell,where they belonged, without ripping off taxpayers and secured creditors.
+1
Exactly my sentiments!
Wow, tell us what you really think!
At least I learned who’s comments I don’t have to read anymore on TTAC – thanks in advance for my future time savings.
Typical.
hey cognoscenti, got a point hidden in there somewhere?
He can’t hear you. He has his fingers in his ears.