Government Down $16 Billion on GM Bailout

story from The Weekly Standard
Jun 5, 2012

Government Down $16 Billion on GM Bailout
The U.S. Government owns a lot of stock in General Motors. Around 26%.

Selling that stock now would result in a loss of around $16 Billion !!!!

Romney says SELL !!

Hmmm. I wonder if he thinks it will go lower ?

Romney says Obama is "holding" because of possible political repercussions.

Mitt Romney maintains that "President Barack Obama is holding on to the government's stake in General Motors to avoid an embarrassing financial loss before the election, and says he'd sell the stock quickly if he wins the White House," according to the Detroit News, which recently interviewed the Republican presidential candidate.
Car GM

"There is no reason for the government to continue to hold (its GM stake)," Romney tells the news outlet. "The president is delaying the sale of the shares to try and avoid the story that the taxpayer took another loss. I would get the company independent from the government and run for the interests of the consumer and the enterprise and its workers -- not for the political considerations of government officials."

And that's the political reason: If it were to unload its shares today, the government would lost $16 billion on the deal. "At GM's Monday closing price of $21.11 a share, the government would lose $16 billion on its $49.5 billion bailout," the Detroit news reports.

Romney believes that this reason alone is why Obama won't sell the shares--since it would not be the politically expedient thing to do.

The government still owns 26 percent of GM, as it has for almost the last three years.

Two other major holders of GM are:

UAW RETIREE MEDICAL BENEFITS TRUST ------- 160,150,000 shares
CANADA GEN INVESTMENT CORP -------------------140,084,746 shares

GM Major Holders

Related Article from The Detroit News

Washington — Republican Mitt Romney believes President Barack Obama is holding on to the government's stake in General Motors to avoid an embarrassing financial loss before the election, and says he'd sell the stock quickly if he wins the White House.

In a wide-ranging half-hour interview with The Detroit News, the presumptive GOP nominee also said he'd review pending rules that will require automakers to almost double fuel efficiency requirements by 2025, and believes Detroit may need a leadership change in order to fix its nagging financial problems.

As part of the government's GM bailout, the U.S. Treasury still holds a 26 percent stake in the Detroit automaker, and has been sitting on that share for 35 months.

Romney vows quick U.S. exit from GM

Romney is right as long as Government is involved with GM that stock will never go up.

The demand for any given stock makes the price go up and that in turns raises capital that the business can use for other purposes/

Obama is wrong and hasn't a clue,and should have never gotten involved.

I'm still trying to figure out why we bailed out any of these companies. We here in America are supposedly a free market system and that means you win are lose on your own merits. How many small buisness have the goverment bailed out? And if the market was truely that bad then someone explain how Ford survived?

It was a political move to garner the union vote, why would anyone think the goverment would do the right thing now if it wasnt politically expedent to them at the moment. This is brought to you by the same group that has not passed a budget in over 1100 years.

Is the CDIC public own'd like my Canadian Tax Payer dollars at risk as well, and what did the gov on Canada take as a loss if we were to sell our stake as well. Is this not an international issue not just an Obumma issue???

SaneThinking

I'm still trying to figure out why we bailed out any of these companies.

The reason behind GM is rather simple to pay back the current adminstration's union ties, and again the same reason that we saw with the $787 million dollar stimulus, and the same thing we have seen with the push for "infrastructure" spending.

It is all about the unions and securing the left's biggest cash cow and support mechanism.

Originally posted by neo96
Romney is right as long as Government is involved with GM that stock will never go up.

The demand for any given stock makes the price go up and that in turns raises capital that the business can use for other purposes/

Obama is wrong and hasn't a clue,and should have never gotten involved.

It's like he's playing the $100.00 slot machine at a Casino...with our money....

Des

In answer to my own question, the fund that owns GM stock in Canada is government owned and we are holders of just as much of a loss. In november of 2010 our government sold off 35 million shares at $33/US.

Link to Archived Finances of CDIC www.fin.gc.ca...[/url]

Due to the fact we have 140 million outstanding shares to be sold at 1/3 less the value from 2010 I would say that the tax payer of Canada is on the hook for equal loses in light of this info, something I may have to write a letter to the finance minister about because this losing investment doesn't seem to good for my country....

SaneThinking

reply to post by SaneThinking


Good point about Canada being part of the mess.

Welcome to the world of internationalism.

Welcome to the world of the most recent definition of Marxist / Corporatist "nationalism".

Big Corporations = Big Government

Big Government = Big Corporations

Another point is that GM owns companies in other countries.

That means the U.S. and Canadian governments own foreign companies ?



How come both nations don't jointly "nationalize" GM ?

Maybe that way they could actually have "the people" own it.

Then we could all get free cars

I think Bush bailing out the auto industry was a great thing.

He has even declared he would do it again, and I would agree with him.

www.autoguide.com...


Why are you all bashing Obama anyway?

Originally posted by neo96
...the same reason that we saw with the $787 million dollar stimulus...

We should have been so lucky that it was only $787 million, he handed out a bit more.

So what will happen to the stock prices if the government dumps that much stock on the market. Many people will lose a lot of money when the stock crashes. The only reason it's not increasing more is that people are worried that the government may sell. I see Romney doesn't own any GM stock. He doesn't care about American companies.

They should have just let the Auto company die off to begin with.

reply to post by David134


Please explain if were supposed to be all about the free market, that our corporations are manufacturing in China. You know the land that doesn't let it's companies fail and is always willing to expand a factory completely free of charge? Americans are fairly stupid people really. "Hey you stop sending our jobs to China, we will do whatever you want." But then cry about socialism when the corporations are all about it. Newsflash people those inflated union wages and benefits you whine and cry about those are part of why the economy didn't totally tank they had enough spending power to keep everyone else in their minimum wage jobs.

The Unions didn't cause these problems, stagnant wages while increasing pay for management did. The more disposable income the working class has and the more time they have to spend it are what makes the economy strong for everyone because there is simply more of them.

I see Romney doesn't own any GM stock. He doesn't care about American companies.

Well first off all Gm has to do is buy back it's own stock taking that supply out of the market,and that act would increase the value of the shares which is option one, or the could dump it and short and sell it and still make money.

Just because someone doesn't own Gm stock doesn't mean they do not care about American companies it's because the stock sucks quite frankly and there are better investment opportunities out there.

There is a couple of reason Gm stock is low:

A. there is too much of it out there
B. government owned.

And a few other reasons.

So what? the stock is lower at the moment, most stocks are. Its no a loss unless the govt sells now. The govt just has to hold until it goes up, which it will. When? If I knew Id be rich or anyone for that matter.