General Motors plans to buy back government shares
General Motors has just announced it is going to buy back 200 million of its shares from the Treasury Department, which plans to sell the rest of its stake in the auto company in the next year or so.
That would bring an end to the $50 billion taxpayer bailout of GM, which had to be rescued back in 2009.
GM suffered many growing — or rather shrinking — pains as it sought to regain its financial footing. After declaring bankruptcy, the company eliminated many of its money-losing operations and debt, says Michelle Krebs of Edmunds.com.
“Since then, they have been doing well in the marketplace,” she says. “They’ve produced a lot of new products that have been hits with customers — so they’re building up some cash.”
Following the bailout, the auto giant was dubbed “Government Motors”– a less-than-flattering nickname some think served as strong motivation for the company to buy back the government’s shares as soon as possible.
“I think they’ve been very eager to get the government out of their business,” says Krebs. “They’re very ready. They’ve been ready for this for a while, it’s just a matter of how they are going to finance it.”
So was the investment worth it for us taxpayers?
“All in, the government spent about $49.6 billion,” says Mike Colias of Automotive News. “If you look at everything GM has repaid, and everything the Treasury has gotten back — the taxpayers are still out about $21 billion (that’s the stake that the government still owns in GM.”
Taxpayers will still get some of that back, he says, but not all of it.
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