Within the next 12-15 months, you won’t have “Government Motors” to kick around anymore — the federal government and GM have announced a plan for the U.S. to begin selling its remaining stake in the automaker, starting today with a sale of 200 million shares back to GM.
The company will buy 40% of the remaining shares held by the government for $27.50, or about $2 above the current market price for GM stock, costing it a total of $5.5 billion. The Treasury Department will then begin an orderly public sale of the remaining 300 million shares beginning in January 2013, with the goal of totally exiting its ownership of GM by March 2014. The stock sale today will leave the Treasury with a roughly 19% overall stake in the company.
“This announcement is an important step in bringing closure to the successful auto industry rescue; it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” GM Chairman and CEO Dan Akerson said in a statement.
This would bring to an end the government’s involvement in the bankruptcy and bailout of the U.S. automakers, an issue that has weighed on the minds of some car shoppers who have avoided GM due to objections over taxpayer money being used to fund its bankruptcy. The announcement today confirms that the government is not going to recoup its total investment in GM — for that, the stock price would have to be $53 a share or more — but for many the end result of tens of thousands of jobs preserved throughout the country during the greatest economic crisis of the past 80 years is worth the loss in taxpayer dollars.