(Adds detail on car sales, GM profits, GM investments, Treasury
By Paul Lienert
DETROIT Nov 21 The U.S. Treasury Department
said it expected to sell its remaining shares of General Motors
Co by the end of the year, a plan that may leave
taxpayers with a shortfall of about $10 billion on the
automaker's 2009 bailout.
Treasury on Thursday said it had completed the sale of 70.2
million shares of GM stock and to date had recouped $38.4
billion from the $49.5 billion taxpayer-funded rescue of the
At current prices, Treasury would recoup another $1.2
billion from its remaining stake of 31.1 million shares,
bringing its total recovery to $39.6 billion. Treasury said its
initial cost basis for the GM shares was $43.52 per share.
Treasury previously said it expected to exit by April 2014,
but analysts had expected it to move up the final sale date.
"Our goal was never to make a profit," said a Treasury
official who requested anonymity. "It was to save the U.S. auto
U.S. auto sales through October have risen 8.4 percent, with
sales expected to top 15.5 million for the full year -
comfortably above the recessionary trough of 10.4 million in
The Detroit automakers are profitable, too, although GM's
net earnings for the first nine months dropped to $4.3 billion
from $5.0 billion in 2012. One thing that hasn't changed is that
the majority of those profits are still driven by large pickup
trucks and SUVs, which contribute more than two-third of GM's
global pre-tax earnings.
Treasury said the final GM share sale would take place by
year-end, subject to market conditions and if average daily
trading volumes continue at recent levels.
GM stock was up 1.7 percent at $38.36 in afternoon trading.
Analysts have said Treasury's exit from GM would lift the
"Government Motors" stigma from the automaker, which would also
be able to begin paying dividends for the first time since the
restructured company returned to the market with an initial
public offering three years ago.
Treasury's sale of the shares "could lead to the lifting of
compensation limitations for GM's key executives," Buckingham
Research analyst Joseph Amaturo said in a Thursday note to
The removal of those restrictions also may enable GM to
offer a more generous and competitive compensation package if
the board elects to search for outside candidates to succeed
Chief Executive Officer Dan Akerson, said analyst Matthew Stover
of Guggenheim Securities.
In a quarterly filing to Congress in late October, the U.S.
government said it already had booked a loss of $9.7 billion on
its shares, which were acquired as part of GM's Chapter 11
bankruptcy filing and subsequent bailout.
Treasury since then has whittled down its GM stake through a
series of stock sales.
A healthcare trust for the United Auto Workers union still
owns a stake of about 10 percent in GM.
"While the U.S. Treasury's equity stake draws to a close,
our work to transform GM continues," GM said. "We're making
great progress in our efforts to make the most of this second
A GM spokesman on Thursday said the company since July 2010
has invested $8.8 billion in 34 U.S. facilities, "saving or
creating more than 25,000 jobs."
The GM bailout was implemented under the government's
Troubled Asset Relief Program (TARP), which disbursed $421.6
billion and has recovered $406.7 billion. The total does not
count Treasury's additional shares in AIG, which Treasury valued
at $17.6 billion in a Wednesday report.
(Additional reporting by Timothy Ahmann and Jason Lange in
Washington; Editing by Lisa Von Ahn, Gary Hill)