Ontario Sells Last GM Shares to Recoup 83% of Bailout MoneyGreg Quinn
Ontario sold the last block of General Motors Co. shares acquired during the automaker’s 2009 bailout, saying it recouped about 83 percent of its total contribution.
The last block of shares sold for C$1.55 billion ($1.25 billion) and generated a profit of C$1.1 billion after taking into account the book value of the shares, Finance Ministry spokesman Scott Blodgett said by e-mail Thursday. Ontario recovered C$2.99 billion of the C$3.62 billion advanced to GM in 2009, or about 83 percent, he said.
“The purpose of this investment wasn’t to make or lose money on a share sale,” Blodgett said. “It was to ensure that a vital sector of the Ontario economy survived the financial crisis.”
Canada and Ontario invested as the Detroit-based company filed for bankruptcy protection, taking an equity stake of about 12 percent to protect local jobs as the U.S. offered its own aid. Union officials criticized the share sale, saying it makes GM’s commitment to Ontario less secure.
“As a major shareholder the government had some influence,” Jim Stanford, an economist with the Unifor union that employs 21,000 Canadian automobile workers, said by phone from Toronto. “Given the uncertainty of future investments in Oshawa, this wasn’t a good time to sell the shares,” he said, referring to a local GM factory.
Charles Sousa, Ontario finance minister, said in a statement Wednesday from Toronto that 36.7 million common shares were sold over the last two weeks. The move isn’t being matched by Canadian Finance Minister Joe Oliver, whose department said in a statement its goal remains “maximizing the value” of a sale of its GM stock.
“The Ontario government is proud to have been able to play an important role in protecting thousands of jobs across the province through its support of the auto sector in 2009,” Sousa said. “Today’s announcement marks an important step in unlocking the value of the province’s assets to continue to grow our economy.”
The number of GM employees in Canada has fallen to about 9,000 today from about 12,000 at the end of 2008, Adria MacKenzie, a GM spokeswoman, said by e-mail Thursday. The current job total is “consistent” with estimates given to the Canadian and Ontario Governments in 2009, she said.
The U.S. Treasury’s bailout fund lost $11.2 billion on the rescue of GM, the special inspector general for the U.S. Troubled Asset Relief Program said in a report to Congress in April 2014. The U.S. invested $49.5 billion in the bailout.