- The Washington Times - Monday, May 6, 2013

The Treasury Department said Monday that it was preparing the ground to sell the rest of its stock in General Motors Co., but taxpayers could take a hefty loss.

The George W. Bush and Obama administrations invested nearly $50 billion in 2008 and 2009 to bail out Detroit’s largest automaker, and the government has recouped about $30 billion from sales of shares. The government once owned a 60 percent stake in the company, but its investment has shrunk to about 18 percent, or 241.7 million shares.

GM’s stock price was down less than 1 percent Monday to close at $31.83. At that rate, the government would make about $7.7 billion selling its remaining stock in the company, which would turn into more than a net $11 billion loss for taxpayers from the bailout.

GM stock would have had to climb above $50 a share for taxpayers to make back all their money, but the Treasury said it did not rescue the company to turn a profit but to save millions of jobs at risk if the nation’s biggest automaker collapsed.

The government’s “emergency support to GM during the financial crisis was necessary to prevent the collapse of the American auto industry and save more than 1 million American jobs,” Tim Massad, assistant secretary for financial stability at the Treasury, said in a statement. “Earlier this year, Treasury launched an effort to sell its remaining shares in GM common stock. We are pleased with the progress to date and will continue exiting this investment in accordance with our previously announced plan and timetable, and in a manner that maximizes returns for taxpayers.”

The auto bailout played a major role in the presidential campaign last year. President Obama’s supporters highlighted Republican challenger Mitt Romney’s opposition to the president’s plan in key industrial swing states such as Ohio, Michigan and Wisconsin.

The Treasury said late last year that it planned to sell all of its stock in the company within 15 months. It is selling the stock in stages to balance the need to exit the company with the need to sell when the stock price is high. It now is taking the next step in the process.

In December, GM repurchased 200 million shares from the government for $5.5 billion.

That followed GM’s November 2010 IPO, in which the Treasury sold enough shares to shrink its investment in the company to 32 percent.

The auto bailout was part of a larger rescue package known as TARP, or the Troubled Asset Relief Program, which spanned several American industries.

The Treasury has recovered about 95 percent of those funds ($419 billion). Excluding the housing industry’s bailout, the government has made a slight profit, collecting $414 billion of the $411 billion in bailout money.

GM officials offered no comment on the Treasury’s announcement Monday. CEO Dan Akerson said in December that the federal government’s move to sell the final tranche of its ownership stake “is an important step in bringing closure to the successful auto industry rescue” and “further removes the perception of government ownership.”

Chrysler LLC, which also received taxpayer bailout funds, bought back its last share from the Treasury in 2011.

• Tim Devaney can be reached at tdevaney@washingtontimes.com.

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