Advocacy

Taxpayers to Lose Billions as GM Buys Stake Back from Government

By Daniel Harper

The American taxpayers stand to lose billions as General Motors today announced a plan to buy back 40 percent of the company owned by the federal government.

“The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock’s closing price on Tuesday,” the Detriot News reports.

However, the break-even price — the price that GM would need to pay for each share in order to pay back the money the government put in to the company —was $53 a share. That number has now risen dramatically.

“As a result of GM’s buy back, the government has recovered about $28.6 billion of its $49.5 billion GM bailout, which means it will most likely lose billions when selling its remaining shares,” MLive.com reports. “The government would need to sell its remaining shares at a price of $69.72 to break even. That’s up more than $15 from earlier this year, when the U.S. Treasury would have to sell its 500 million remaining shares at about $53 per share.”

GM, or “Government Motors” as some critics have called it, has continually been ridiculed due to the government ownership, which was the result of the auto industry bailout that began under President George W. Bush in 2008 and was expanded by President Barack Obama in 2009.

The U.S. Treasury initially owned nearly 61 percent of GM as part of the auto bailout, which forced the automaker and crosstown rival Chrysler through a government-backed bankruptcy.

The Obama administration completely exited Chrysler last year after recovering $11.2 billion of its $12.5 billion bailout to the Auburn Hills-based automaker.

And who’s footing the cost? The American taxpayer, of course.

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8 Comments on "Taxpayers to Lose Billions as GM Buys Stake Back from Government"

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Jones sabo his or her own planning to proclaim all kinds from what you think the property to obtain
3 years 5 months ago

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ajax
3 years 9 months ago

I saw an interview of the spokesman for Chevrolet about a month ago. Chevrolet ,since it paid off the unions and closed Delco Remay with our tax dollars has two deals with China to produce Chevrolets there. Are we not glad that we will be able to get cheaper cars? Of course China won’t allow our workers into their country to get their jobs back.

Norm Lindsey
3 years 9 months ago

This administration seems well satisfied with the deal. They really don’t care about being paid back, they got the UNION votes. They ” OBAMA” could care less about what happens to the people of this great country. The only thing the unions do for the workers, is make lazy workers out of very good workers. This guy has to be impeached before it is too late. He wants to be a dictator and in his own mind thinks he already is!

Richard D Fremin Sr
3 years 9 months ago

This is normal Washington politics as usual.This nucklehead obama is going to keep giving away everything until we are all living in the gutters of this great nation.He talks about taxing the rich,but he is giving away millions upon millions of our hard earned dollars just so he can appear to be a savior.It’s hard to beleive that all these STUPID people gave this fool 4 more years to further distroy this once great country.GOD bless us all

Ron Bentley
3 years 9 months ago

Amen

Van Hamlin
3 years 9 months ago

This was a union bailout on the taxpayers dime. Other unions were ignored and even punished while the UAW continued to collect high wages. GM should have went through normal bankruptcy procedures. Marxism just does not work in the real world.

Daryl
3 years 9 months ago

I am 60 years old and have been a loyal GMC purchaser for years, I stopped in 2008 and will never buy again.
Something is drastically wrong with our country and no one wants to admit it.
Romney was right.

Mike Schoeben
3 years 9 months ago

The taxpayers take a bath and GM is in a better position to get in bed with, it’s already partner, China. All of which can’t be a surprise to the administration.

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