Feds sell off big hunk of General Motors stock

10:56 AM, Mar 12, 2013   |    comments
A sign on the top of the General Motors building in Detroit (Getty Images file)
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(USA Today) -- There's a little less government in the automaker once derided as "government motors."

The federal government has sold another big piece of its holdings in General Motors, allowing it to take another step away from the aftermath of its 2009 bankruptcy reorganization. The government's investment saved GM, but raised a debate about how far government should go to save private businesses, even those considered too big to fail. During that time, some criticized the GM deal as creating "government motors."

The Treasury Department tells Congress in a new report that it sold $489.9 million worth of GM common stock last month, the Associated Press reports. The report says the government has recovered about $29.8 billion of its $49.5 billion bailout, leaving taxpayers still on the hook for $19.7 billion.

The price per share in the latest sale was not immediately disclosed, but the AP says GM stock ranged in price from $26.19 to $29.36 in February.

If the government sold about 17.6 million shares, based on the midpoint of its share price last month, that means it still has a 277-million stake in GM. In order to break even, taxpayers would have to see the government get more than double the recent share price, at least $71 a share, in order to break even on the GM stake.

Of course, the direct cost to taxpayers may end up paling compared to the losses to the economy if GM has been allowed to go under. The Obama administration touted its success in saving GM during the presidential cmapaign last year, the thousands of jobs saved -- even more at parts suppliers and rippling through the economy. With the automaker back on its feet, it's turning our more models that appeal to car buyers.

GM remains the nation's largest automaker.

(USA Today)

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