clear
Sunday May 3rd, 2015 6:04PM

Government sells remaining stake in GM

By The Associated Press
DETROIT (AP) -- The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.

The Treasury Department sold its final shares of the Detroit auto giant on Monday, recovering $39 billion of the $49.5 billion it spent to save the dying automaker at the height of the financial crisis five years ago.

Without the bailout, the country would have lost more than a million jobs, and the economy could have slipped from recession into a depression, Treasury Secretary Jacob Lew said on a conference call with reporters.

Now, the American auto industry is back, President Barack Obama said in a statement. "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.

The government received 912 million GM shares, or a 60.8 percent stake, in exchange for the bailout in 2008 and 2009. It began selling shares once GM went public again in November of 2010, and the pace picked up this year as the stock rose more than 40 percent. Last month, the government said it expected to sell its remaining 2 percent stake by the end of the year.

Earlier Monday, Mark Reuss, GM's North American president, told reporters in Warren, Mich., that a government exit would boost sales, especially among pickup truck buyers. GM has said repeatedly that some potential customers have stayed away from its brands because they object to the government intervening in a private company's finances. Because of the bailout, GM had been tagged with the derisive nickname "Government Motors."

"We will always be grateful for the second chance extended to us, and we are doing our best to make the most of it," GM Chairman and CEO Dan Akerson said in a statement.

During the conference call, treasury officials shrugged off a question about whether GM should have been required to pay more because it has a large cash stockpile, saying that the bulk of the bailout money was converted to GM stock. Not doing the bailout would have cost the government more than it lost in missed tax revenue and payments for unemployment benefits and pensions, the officials said.

The company now is sitting on $26.8 billion in cash and is considering restoration of a dividend.

GM went through bankruptcy protection in 2009 and was cleansed of most of its huge debt, while stockholders lost their investments. Since leaving bankruptcy, 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.

GM shares rose 44 cents, or 1.1 percent, to $41.34 in after-hours trading following the announcement. They rose 1.8 percent in regular trading, at one point reaching $41.17, the highest level since GM's 2010 initial public offering.

The auto bailout was part of the Troubled Asset Relief Program, with the bulk of the money going to financial institutions. Treasury said it spent $421.8 billion on bailouts and so far has recovered $432.7 billion, including the loss on GM.

The Center for Automotive Research, an Ann Arbor, Mich., think tank, issued an updated report on Monday saying that if the government hadn't intervened and GM went out of business, nearly 1.9 million jobs would have been lost in 2009 and 2010. Federal and state governments also would have lost $39.4 billion in tax revenue and payments made for unemployment benefits and food stamps, the study said.

But critics say the bailout put the government in a position to choose winners and losers when it should have stayed out of private business.

"The American people are tired of Washington politicians taking their hard-earned money, using it to make risky bets and pick winners and losers, and coming up short," U.S. Rep. Jeb Hensarling, R-Texas, said in a statement.
© Copyright 2015 AccessNorthGa.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 1 year ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 1 year ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 1 year ago )
U.S. News
Missing Ga. bank director arrested in Brunswick
A bank director accused of losing millions of investors' dollars before vanishing last year was arrested Tuesday during a traffic stop in a city in south Georgia.
7:00PM ( 1 year ago )
Amtrak to suspend some Crescent service in Jan., Feb.
Amtrak service will shut down in parts of the Southeast for several days in January and February for rail maintenance by Norfolk Southern Railway.
9:00AM ( 1 year ago )
Lung cancer scans urged for some smokers, not all
Certain current or former heavy smokers should start getting yearly scans for lung cancer to cut their risk of death from the nation's top cancer killer, government advisers said Monday - even as they stressed that the tests aren't for everyone.
7:26AM ( 1 year ago )
Business News
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 1 year ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 1 year ago )
Victim critical following apartment fire
A 41-year-old woman was in critical but stable condition Tuesday after being rescued from an apartment fire in Forsyth County late Monday afternoon.
3:16PM ( 1 year ago )
Local/State News
Feeling US snub, Saudis strengthen ties elsewhere
Increasingly vocal in its frustration over U.S. policies in the Mideast, Saudi Arabia is strengthening ties elsewhere, seeking out an alignment that will bolster its position after it was pushed to the sidelines this year.
4:34PM ( 1 year ago )
NSA reportedly intercepts computer deliveries
A German magazine has lifted the lid on the operations of the National Security Agency's hacker unit, revealing how American spies intercepted computer deliveries, exploited hardware vulnerabilities, and even hijacked Microsoft's bug report system to spy on their targets.
12:31PM ( 1 year ago )
Rockets fired from Lebanon into Israel
Rockets from Lebanon struck northern Israel on Sunday, causing no injuries but sparking an Israeli reprisal shelling in a rare flare-up between the two countries.
12:26PM ( 1 year ago )
Politics
Obama again avoids calling 1915 Armenian killings 'genocide'
WASHINGTON (AP) — President Barack Obama will once again stop short of calling the 1915 massacre of Armenians a genocide, prompting anger and disappointment from those who have been pushing him to ful...
1:00PM ( 1 week ago )
Ex-NFL star Hernandez convicted of murder, sentenced to life
FALL RIVER, Mass. (AP) — Former New England Patriots star Aaron Hernandez was convicted of first-degree murder and sentenced to life in prison Wednesday for a deadly late-night shooting, sealing the d...
8:54PM ( 2 weeks ago )
Clinton kicks off 2016 campaign online, heads next to Iowa
WASHINGTON (AP) — Hillary Rodham Clinton jumped back into presidential politics on Sunday, making a much-awaited announcement she will again seek the White House with a promise to serve as the "champi...
7:56PM ( 2 weeks ago )
Hall, White, Jefferson schools recognized nationally for use of technology
Three school districts in northeast Georgia - Hall, White, and Jefferson - have received national recognition for their use use of innovative technologies. They earned top spots in the Center for Digital Education's and the National School Boards Association's 10th annual Digital School Districts Survey.
By Staff
1:00PM ( 3 weeks ago )
US Capitol lockdown lifted after man fatally shoots himself
WASHINGTON (AP) — A precautionary lockdown of the U.S. Capitol was lifted after about two hours Saturday following a suicide by a man carrying a protest sign.The man died after shooting himself on the...
6:15PM ( 3 weeks ago )