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Government cuts GM stake to 7.3 percent


The U.S. Treasury Department has slashed its stake in General Motors Co. to 7.3 percent, putting the government within months of ending its direct ownership of the Detroit automaker.

The government said in an investment transaction report Tuesday that it had reduced its stake in GM more than previously expected. The report comes more than four years after U.S. taxpayers rescued GM and Chrysler Group LLC, providing emergency financing to guide the automakers through Chapter 11 bankruptcy. Chrysler, based in Auburn Hills, is now controlled by Italy’s Fiat SpA.

The latest move is part of the government’s broader plan — revealed last December — to gradually sell off its GM shares by early 2014.

The U.S. owned 13.8 percent of GM stock as recently as June 12, according to the transaction report.

The government last week said it sold $811.1 million in GM stock in August.

The Treasury Department sold 110.3 million shares of GM stock from May 6 through Sept. 13 at an average price of $34.65 per share for total proceeds of $3.8 billion, according to Treasury documents.

In its August report to Congress, the Treasury Department said it had recovered about $35.4 billion of its $49.5 billion GM bailout.

Although GM’s stock, which rose 49 cents Tuesday to close at $36.71, is enjoying a strong year, the government is still likely to lose about $10 billion on the GM bailout. The final figure will depend on the performance of GM shares over the next several months.

Despite the loss, President Barack Obama has described the bailout as a success, saying it was critical to preserve the U.S. auto industry and to prevent the broader economy from collapsing.

The White House said in a separate report Tuesday the government is recouping “significantly more than expected” on the auto bailouts.

“Today, the Big Three (GM, Chrysler and Ford Motor Co.) are profitable and gaining market share for first time in 20 years,” the White House said.

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712 Posts
I do not believe anything that the White House says. :(

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