U.S. Has 'Clear Path' To Selling Its Remaining General Motors Stake

DETROIT - The Treasury has a "clear path" to selling its remaining stake in General Motors Co shares, a senior Obama administration official is expected to say on Wednesday.

Former auto czar Ron Bloom will testify that the government has plans to exit its investment in GM "as soon as practicable," according to prepared remarks posted on the Committee on Oversight and Government Reform website.

Bloom, now the White House manufacturing adviser, will testify during a committee hearing called "Lasting Implications of the General Motors Bailout." The Committee on Oversight and Government Reform is a government committee that has broad oversight on government policies.

GM went public last year, allowing the U.S. government to nearly halve its 61-percent stake in the automaker. The government currently holds 32 percent of GM's common equity.

"The government remains a reluctant shareholder and intends to dispose of its investment as soon as practicable, with the dual goals of achieving financial stability and maximizing returns to taxpayers," Bloom will say in his remarks.

Sources previously told Reuters that the U.S. Treasury did not plan to sell its remaining shares in GM until August, after the automaker's second-quarter earnings report.

GM shares have fallen below their $33 IPO price, due in part to concerns about government involvement. GM stock was 53 cents or 1.8 percent higher at $30.12 in afternoon trading on the New York Stock Exchange.

(Reporting by Deepa Seetharaman, editing by Gerald E. McCormick)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[Frank Belzer]

12:26 PM on 06/23/2011

Companies like GM failed to really differentiate themselves. I discussed a similar challenge facing the airline industry here.http://www.omghub.com/sales-archaeologist-blog/tabid/85464/bid/54902/Helping-Airlines-and-every-other-vertical-Compete-by-being-Different.aspx
You cant keep doing the same old "old" stuff and survive these days!

[jwoww]

10:12 AM on 06/23/2011

Obama plan buy high - sell low stick the taxpayers with the bill

[jcko]

03:14 AM on 06/24/2011

I believe Obama bought it at GM bankruptcy sale. So how did he buy high?

[ejhickey]

10:38 AM on 06/24/2011

The federal government's break even sale price for GM is $53. that was the price the government paid per share to become an equity holder in GM. currently the government owns about 33% of GM and wants to sell it and get out.

[Vida Grant]

04:22 AM on 06/23/2011

One of simple secret about auto insurance is your location can affect premium pretty easily. If you have two address try both of them and see if your premium goes up and down. If you need tips on auto insurance search "Auto Insurance Clearance" it is the best place

[MichaelMcKLA]

01:06 AM on 06/23/2011

I just finished reading Bob Lutz's new book "Car Guys vs. the Bean Counters." It would appear that GM is well on the path to long-term profitability. Kudos to Obama for saving hundreds of thousands of jobs, a large part of our industrial infrastructure and kudos to GM for getting its act together (in large part due to Lutz). The taxpayers will probably get its investment back soon.

[J T K]

04:09 AM on 06/23/2011

He "saved" those jobs by spending our money. He had no ethical or moral right to spend in the first place, same with the bank bailouts. The government never should have been and should never be in the business of helping corporations and that includes bailouts, incentives, tax breaks, and subsidies for every company large and small, except for possibly short term help for small businesses and start-ups (with strict limits).

[MichaelMcKLA]

04:49 AM on 06/23/2011

So, how are things in Ayn Rand-ville?

[ejhickey]

10:42 AM on 06/24/2011

If GM is really on the road to profitability , why has their stock been going down since the IPO? Bob Lutz is a put z

[mashtoe]

12:58 AM on 06/23/2011

GM has more factories, more workers, and more investments in communist China than in the US. Obama did a wonderful job of ensuring that US technology is transferred to a communist dictatorship that has nukes pointed at us. Bravo! Good job. And wait til China starts importing their Chinese Buicks into the US.

[Spiggy]

01:17 AM on 06/23/2011

Oh let me guess.....GM just recently built all of those factories and hired all of those employees in the last 2-3 years?

GM has factories in Europe also....5 in Germany alone if I am not mistaken. The reason the factories are over there and not over here is the same reason why the Japanese auto makers are building plants over here.....cheaper to build on site.

Next time you want to come off yelling how anti American Mr. Obama is....you should think about some facts first....You can do this while your shopping at Wal Mart.

[offmyrocker]

11:19 PM on 06/22/2011

I thought our lame obama said everyone is paid back? As always 10 minutes after the BS Oh well not that money no no just the money that WAS in th eright pocket was paid to the left pocket. This obama guy is a crook

[Spiggy]

01:26 AM on 06/23/2011

Do you understand the concept of owning stock. The US owns 32% of GM currently. There is nothing for GM to pay back. It is up to the US to sell that stock but they are waiting like a smart investor.

GM is currently doing well but the stock is waiting for a big push. That push usually comes from earnings reports....and if GMs is good, then the stock will be worth a lot more than it is now.

Learn some facts first before you go spouting off sounding like an ignorant troll from the world of Fox News

[offmyrocker]

09:31 AM on 06/23/2011

NO please explain, what I dont under stand is the US goverment owning stock in a private company that should have filed for bankrupcy, do you understand that.....we dont buy, own or rent private business

[The Insider]

09:45 PM on 06/22/2011

Wow, how does a Government owned by the World Fortune buy General Motors already owned by the World Fortune? And how does General Motors "Go Public" without "Permission" from the World Fortune which would never sell a Corporation Publicly when they could just end World Poverty and pay people directly. Also as an "Insider" I know that Russia Seized at least 75% of General Motors "Major" Operations a year ago. This will all be the cause of a "Very Big Funk" later this year I would imagine!

[vinyl1]

09:35 PM on 06/22/2011

They may be able to dump the stock at the current price, but anything higher would be a stretch. GM still has serious problems in its US manufacturing operations, and the competition is tough. There have been a number of downgrades lately.

[mrsm00the]

09:26 PM on 06/22/2011

The Obama Administration is between a rock and a hard place when it comes to GM stock.

Obama wants to get the taxpayers' money back so that it doesn't look like a bail out. However, he needs to get around $53 a share for the taxpayers to break even. As the article states, GM stock is currently selling in the low 30's. Unfortunately, the UAW contract is up this fall. The Union gave up a lot to keep GM alive. Now its members are gonna want those give-backs back. With the Citizens of the United States owning a third of the stock, it will not be in their best financial interest to give the Union what it wants. That's why the Administration wants to dump the stock in August.

Obama has to either screw the Union or screw the Taxpayers.

[offmyrocker]

11:20 PM on 06/22/2011

But obama said this was already paid back...that is if you beleived his lying arss

[bthechangeyouseek]

06:48 AM on 06/23/2011

loan vs. owning stock, big difference.

[dawgspiel]

04:44 PM on 06/23/2011

He said the loan had been paid back and it was. A different thing.

You righties are unbelievable.

[pcs5141]

01:06 AM on 06/23/2011

Well he certainly isnt going to screw his union buddys.

[iridium53]

08:59 PM on 06/22/2011

So, lots of Government investment (by taxpayers) in GM.

How many jobs did they cut in the U.S.?
How much did they invest in the U.S.?

How many jobs did they create in China and elsewhere?
How much did they invest in China and elsewhere?

Nobody is telling what the net job loss from 2008 until now has been.

[vinyl1]

09:33 PM on 06/22/2011

They have a lot of jobs in China because they are selling a lot of cars in China. They are the leading car manufacturer there, and the business is highly profitable.

If they didn't have that, the stock would be just about worthless,and the company would go bust again.

So what do you think they should be doing?

[mashtoe]

01:03 AM on 06/23/2011

Are we a communist nation? Do we all share in the wealth of GM equally? No. A few at the top take ALL the profits. But I pay 33% top marginal tax rate and executives only pay 15% on their capital gains!! So workers pay a higher percentage to save the investments of people who are in a hurry to offshore to commits China!

The simple fact is this system is utterly broken, corrupt, and unfair. We are no longer a free market but instead we are ruled by corporate communist!

[dawgspiel]

04:48 PM on 06/23/2011

Really?

May U.S. Retail Sales Report for GM
• Chevrolet Cruze retail sales up 150%
• Combined GMC Terrain, Chevy equinox sales up 58%
Buick and GMC retail sales up for 20th consecutive month
• Cadillac retail sales up 16th straight month, Chevy up 9th straight month

GM reported selling 221,192 vehicles in the U.S. in May, a 9% increase over 2010. Fuel efficient and alternative fuel vehicles drove the sales increase.

Sounds like they're selling a few cars in the U.S. too.

http://investor.gm.com/sales-production/

[Lolo919]

08:42 PM on 06/22/2011

Great. Sell it quick before someone gets another bright idea or the UAW talks their way to a piece of the action.

[rdimitrir]

08:31 PM on 06/22/2011

Auto bailout is a huge success for Obama - millions of jobs saved, GM and Chrysler paid back government loans in full and with interest, and their cars and better and more popular then ever.

Chevy Volt triumph - 2011 car of the year was made possible by this Administration.

[iridium53]

08:59 PM on 06/22/2011

Millions of jobs saved?
Based upon what information?

[hypnotoad72]

10:22 PM on 06/22/2011

Not these articles:

http://www.thenation.com/blog/new-gm-layoffs-factory-closings-offshoring
http://www.bloomberg.com/news/2010-06-09/gm-ford-to-accelerate-growth-at-mexico-plants-where-workers-get-26-a-day.html
http://www.economicpopulist.org/content/gm-offshore-outsourcing-us-jobs

There are far more of those articles, especially the first two, than there are articles of new GM plants opening in the US. (there was at least one recent case, but more jobs were offshored after the bailout.  Not a good use of taxpayer money, giving it to companies that will offshore jobs as a result... Americans paying for the offshoring of opportunities...)

[mashtoe]

01:03 AM on 06/23/2011

Millions of jobs in communist China were saved.

[offmyrocker]

11:22 PM on 06/22/2011

really,,,,have another drink..Volt big pile of over price crap does nothing it was suppose too typical union crap

[Rugby1]

06:49 PM on 06/22/2011

"GM shares have fallen below their $33 IPO price, due in part to concerns about government involvement. GM stock was 53 cents or 1.8 percent higher at $30.12 in afternoon trading on the New York Stock Exchange."

Um no. The share price has dropped because as you may have noticed, GM is providing 5-6 year 0% APR financing, AGAIN. Their vehicles are not selling that well in the US, the Volt has been nothing short of a disaster, and so they are back to their old tricks. Massive rebates and low cost financing in order to get their vehicles out the door, its not like this was a total disaster before, right?

[bluejoni2525]

08:16 PM on 06/22/2011

Wrong on all counts !!!

[Rugby1]

08:26 PM on 06/22/2011

So prove it. Have you seen the most recent adds for GM cars? Did you read their 10k, or 10Q? Have you seen the sales numbers for the Volt, even with the government being a major buyer of the car despite it noted inferiority compard to the Nissan Leaf? If not then I suggest you check out those things then come back and comment.

Or, then perhaps you can explain why after their much talked about IPO (you know where the unions got back a large portion of capital and wall street overinflated the stock) why their shares have not increased in price despite all the cheerleading and despite the fact they are off the hook for paying corporate taxes due to the illegal tax-loss carry forward. Please enlighten me.

[ejhickey]

05:39 PM on 06/22/2011

the government has a "clear path " to sell its stake in GM anytime they want. It just depends on how much they want to lose. GM stock has to rise to $53 per share for the government to break even.

[daultman463]

06:28 PM on 06/22/2011

When do we get back our other 50 billion from GM??

[nofriendofrepublicans]

07:32 PM on 06/22/2011

When do we get our trillions back from wallstreet?

[1oldhippie]

08:18 PM on 06/22/2011

When do those, defrauded, of their homes, get THEM back?