U.S. Sells Remaining GM Shares as Chapter of Bailout Ends
The U.S. Treasury Department sold its remaining shares (GM) in General Motors Co., ending almost five years of government ownership of the nation’s largest automaker.
“With the final sale of GM stock, this important chapter in our nation’s history is now closed,” Treasury Secretary Jacob J. Lew said in a statement today. The Treasury said it has recouped $39 billion from its original GM investment. The Treasury initially announced its plans to exit GM by the end of the year on Nov. 21.
Shares of GM rose 1.8 percent to a record-high $40.90 and are up about 42 percent this year. The Standard & Poor’s 500 Index has advanced about 27 percent this year.
The wind-down of the U.S. stake in GM brings to an end a linchpin of the government’s Troubled Asset Relief Program. The auto industry’s revival was a flashpoint during last year’s presidential campaign, and President Barack Obama turned the issue against Republican candidate Mitt Romney to help win Ohio and Michigan, key states in the election.
The U.S. spent about $50 billion to bail out Detroit-based GM. The exit would end restrictions on pay for top executives that the largest U.S. automaker has said hampered recruiting.
The sales would also mark the end of an era of U.S. government intervention in an industry that was near collapse in 2008, before bailouts from the administrations of George W. Bush and Obama. The investment gave new life to GM and Chrysler Group LLC, slashing debt and rekindling growth. Auto sales are headed for the best year since 2007, and GM, Chrysler and Ford Motor Co., which didn’t get a bailout, are profitable again.
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