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Gm and uncle sam part ways – feds post a $10b loss on bailout

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  • Gm and uncle sam part ways – feds post a $10b loss on bailout



    The United States government has sold its remaining stock in General Motors, Treasury Secretary Jacob Lew announced Monday.

    This means the government no longer owns any part of the automaker.

    “The U.S. Treasury’s ownership exit closes just one chapter in GM’s ongoing turnaround story. We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,” General Motors Chairman and CEO Dan Akerson said in a statement. “Our work continues uninterrupted, and we will keep our sights squarely on our customers and transforming the way we do business.”

    The Treasury sell-off also means the federal government will post a $10.5 billion loss on its $49.5 billion taxpayer-backed bailout of GM. Treasury managed to recover roughly $39 billion of its investment.

    Lew acknowledged the financial loss but explained bailing out the car maker was necessary to save approximately one million jobs.

    “The President’s leadership in responding to the financial crisis helped stabilize the auto industry, and prevent another Great Depression. With the final sale of GM stock, this important chapter in our nation’s history is now closed,” Lew said in a statement.

    “As a result of his efforts, which built on those of the previous Administration, more than 370,000 new auto jobs have been created, and all three U.S. automakers are profitable, competitive, and growing,” he added.

    President Barack Obama also hailed the sell-0ff, saying it marks an important moment in the country’s ongoing “recovery.”

    “When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong,” the president said in a statement. “Today, that bet has paid off. The American auto industry is back.”



    The federal government took in about 912 million GM shares (i.e. a 60 percent stake) in exchange for bailout cash in 2008 and 2009, the Associated Press reported. Washington started selling off its shares after GM launched its initial public offering in 2010.

    GM’s shares rose with Treasury’s announcement Monday. Shares peaked at around $41.17, which is the highest they’ve been since GM’s 2010 IPO:

    GM and Uncle Sam Part Ways – Feds Post a $10B Loss on Bailout

    Top GM executives, including GM’s North American President Mark Reuss, have said in the past that the government bailout and the resulting “Government Motors” moniker hurt the company’s image with certain demographics. GM hopes today’s sell-off will help it shake its association with Washington and boost sales, especially in the pickup truck market.

    But if a recent consumer survey on the bailouts and their influence on consumer bran preference proves accurate, the company may have a long way to go.

    Indeed, after surveying roughly 500 Texas truck buyers, a survey by the National Legal and Policy Center found that the auto bailouts continue to influence consumer preferences.

    More than 60 percent of survey respondents said that bailouts would influence their decision. Forty percent of respondents said the bailout would “absolutely” influence their purchasing decisions, 11.75 percent said “very likely,” and 10.60 percent said very “likely.”

    Meanwhile, the company continues to struggle with consumer demand issues as well as hiccups with suppliers.

    Of course, Akerson has put on a brave face through some of GM’s bigger truck woes and recently said in a company earnings call that “the launches of the new Chevrolet Silverado and GMC Sierra have been nearly textbook perfect.”

    But, again, this doesn’t exactly appear to be the case.

    True, GM has remained mostly profitably since emerging from bankruptcy, posting approximately $20 billion in net income on sales in North America and China. The company has also invested roughly $8.8 billion in facilities in the U.S. and claims it has brought on about 3,000 new workers. The company is even currently sitting on about $26.8 billion in cash.

    But the issue of winning back certain groups that are upset over the bailouts (and probably will stay that way unless the $10 billion is repaid) remains a problem for the company. To this end, it appears GM is trying to woo back these consumers with ads placed in conservative outlets.

    I wear a Fez. Fez-es are cool

  • #2
    Where's our return + Interest?

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    • #3
      That would be the 10.5 billion in loss that taxpayers took. Did you enjoy your free Silverado or Corvette?
      I wear a Fez. Fez-es are cool

      Comment


      • #4
        Originally posted by Forever_frost View Post
        That would be the 10.5 billion in loss that taxpayers took. Did you enjoy your free Silverado or Corvette?
        Nope they wanted 35k for my silverado. Damn I got screwed

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        • #5
          I got screwed twice then.

          Comment


          • #6
            Originally posted by Trip McNeely View Post
            Where's our return + Interest?
            lolz
            Originally posted by davbrucas
            I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

            Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

            You and slow99 should date. You both have passive aggressiveness down pat.

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            • #7
              If they don't start building decent vehicles they aren't any better off than when the gov bailed em out the first time. Wrong wheel drive appliances don't get me to a dealer, so their junk sure won't get me to part with my hard earned cash. Ecoboost is on the radar doe my next vehicle.
              Rich

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              • #8
                It will always still be Government Motors to me. Sellouts.

                CN

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                • #9
                  The 10.5 BILLION lost in this deal is not taking into account the 45 BILLION tax bill that GM owed that was forgiven once the company was given to the UAW. Even if 10.5 BILLION was all that was lost that is still about 10 MILLION per day lost since they were bailed out.
                  Magnus, I am your father. You need to ask your mother about a man named Calvin Klein.

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                  • #10
                    It's reasons like this that I have no guilt about buying "foreign" any more. As far as I know, most companies assemble their vehicles here with American employees. The suck part is buying Honda/Etc, the profits technically go back to their country.

                    I tried to buy Ford, but nothing in their inventory met our requirements. Otherwise, it's all the same. It's not like we're machining much of our own parts here either.
                    Originally posted by MR EDD
                    U defend him who use's racial slurs like hes drinking water.

                    Comment


                    • #11
                      What was not factored in was the money saved in Unemployment etc from all the jobs lost.

                      I'm sure that still puts us tax payers in the hole.
                      "No free man shall ever be debarred the use of arms. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government"

                      -- Thomas Jefferson, 1 Thomas Jefferson Papers, 334

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                      • #12
                        I honestly thought it was going to be worse when all was said and done, but like what was said earlier, big tax breaks help too. I wonder where the market will take the price now?

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                        • #13
                          Originally posted by FATHERFORD View Post
                          What was not factored in was the money saved in Unemployment etc from all the jobs lost.

                          I'm sure that still puts us tax payers in the hole.
                          Payroll at unemployment rates? Baby shit!

                          Comment


                          • #14
                            Is Junky Motors still only funding 20% of their required retirement plan?

                            That is what the execs should have gone to prison for, and would have in any other company.
                            sigpic18 F150 Supercrew - daily
                            17 F150 Supercrew - totaled Dec 12, 2018
                            13 DIB Premium GT, M6, Track Pack, Glass Roof, Nav, Recaros - Sold
                            86 SVO - Sold
                            '03 F150 Supercrew - Sold
                            01 TJ - new toy - Sold
                            65 F100 (460 + C6) - Sold

                            Comment


                            • #15
                              Originally posted by Denny View Post
                              I honestly thought it was going to be worse when all was said and done, but like what was said earlier, big tax breaks help too. I wonder where the market will take the price now?
                              I was expecting a bigger loss myself. My question is this: if GM is now profitable and has a cash reserve, why can't this be treated like a long-term loan and they repay the money given to them (+interest) over time? My guess is that they aren't really profitable by the time you remove all the credits and breaks they're given. How do I get a bailout and get to keep all my stuff?

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