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GOVERNMENT MOTORS

Taxpayers to Lose Billions as Government Exits General Motors

Exit strategy will end 'Government Motors' by 2014

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by PolitixMayday

Staff Writer t

Image: AP

Taxpayers will be out a few billion dollars after the federal government sells 40% of its stock in General Motors. Who's buying? Well, General Motors is, for $27.50 a share.

GM is buying the stock at an inflated price, nearly $2 over its Tuesday stock value, though news of the buyback caused its stock to jump on Wednesday. Regardless, the government will recover roughly $28.6 billion of its initial $49.5 billion during GM's bailout in 2008 and 2009.

The Treasury also announced that it's planning to sell its remaining shares within the next 12 to 15 months, depending on market conditions, Detroit News reports.

For the government to break even now, it'd need its remaining 300 million shares to sell for $53 a pop, according to Mlive. But that's unlikely, writes Felix Salmon for Reuters, as the stock has averaged around $27.95 during its 25-month life.

Via Detroit News, Mlive, and Reuters.
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Did the government's loss on General Motors help the economy as a whole?

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96 Comments (view in Forum)

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  • dances-weebles
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    @woodtick57 woody... the nation's economy doesn't hinge on the fate of general motors, or in fact, any automaker. if they're going to fail, i 'm sure that they can do it on their own.

    tell me, how well is any corporation managed if it borrows millions, if not billions of dollars from the government (or anybody else) and then turns right around and hands it to their upper management in the form of bonuses and raises to their already over bloated salaries?

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  • stepped_in_it
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    Hmmm.....thinking of asking the Gov if they will "bail me out". Will give them 49% of the shares in my business.....me. Hey, they might not be worth much afterwards, but, the Gov doesn't seem to care about that! LMAO
  • stepped_in_it
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    @PoliticalSpice True. And never have supported Iraq, Afgan, Vietnam and all those "wars" that just became nothing more than government/CIA experiments and "control". Don't get me wrong, I fully support our vets 110% as they thought they were doing what's right.
  • RobertJHarsh
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    GM should have been allowed to fail and shut down. We'll be back in here in 5 to 10 years with the exact same problem with them. GM shatting out poor quality disposable goods that end up as junk yard filler in 7 years while Toyota and Honda keep making high quality, yet "boring" cars that have a shelf life of 25 years. Ford will still be around because they figure out they need to copy Toyota (rumor has it they are quietly deploying Six Sigma next year). Chrysler hopefully will adopt the Euro model from Fiat and continue. But GM. It needs to be killed like "Romneycare."
  • woodtick57
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    @DerivePI

    No-one was up for re-election when the bail-out took place. Besides the UI cost, how much would tax revenues have dropped? People without jobs don't pay taxes...

    Some economists say the gov't might have broke even on this deal.
  • DerivePI
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    @woodtick57 - OK, provide facts and figures. How much in taxes? How much in expenses (UI)? How does that compare to the amount lost? Can you at least do some homework or does someone else have to do all the work for you? This is a simple economic analysis any 6th grader can do.
  • DogLady_1
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    @woodtick57 - There were literally hundreds of congressional incumbents who won re-election in 2008. And people without jobs still pay exise taxes, taxes on unemplyment, and sales taxes.

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  • bsking
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    the only thing it helped was the union pension fund. had they gone through bankruptcy the Union slugs would have come out with about a 60,000 dollar pension, thanks to the working people in the United States , the people who pay taxes, those same Union slugs will receive over 100,000 dollars in their annual pensions.... all praise Barack Obama's
  • seedtick
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    The big winner is the UAW. Hell, this was the Barack Husssein Obama plan all along. We now see the American taxpayer actually getting screwed in order for him to pay off his union supporters...and they didn't even have a say in the matter.
  • HPthinker
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    I would rather see the money sent into keeping our industry alive than sending more jobs to China. And Michigan is REALLY hurting... You have to realize there are communitys that depend on this industry. Now that michigan is a righ to work state toyota honda and BMW can start building cars there too. Wages will be lower but still higher than retail and service sectors.
  • seedtick
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    Think about this...there are many other communities in this country that depend upon one industry or another. And, while they are forced to pay off the UAW for supporting Barack Husssein Obama, their industries struggle without any consideration from him. While I am glad that Michigan's auto industry is in better shape, I am also wonderning why the rest of us had to "rescue" it. Ford was the only one of the Big Three that did the right thing and stayed viable without tax dollars.
  • HPthinker
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    @seedtick I drive a FORD and its in fine condition. The biggest problem with the UAW is these pension and FORD has pretty much washed its hands GM to follow. At the same time Yes, every town is hurting ( mine a bit ) and to "rescue" gm is a bit local, i'm still on board. Far as Barry goes, he needs to keep pumping money in to on shore projects, not into the Mid east.
  • seedtick
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    @HPthinker Well, we absolutely agree on this...I have driven Ford products, own two now...one a 2012 and the other a 1998 that I bought new. And, as far as Barry goes, he needs to stop pumping money into anything. Remember, the Federal Government owns absolutely nothing and has absolutely no money. They are, however, in control of a whole lot of our money and assets.
    Instead he needs to cut out the over-regulation and high taxation and get out of the way of industry. It will thrive then and he will get plenty of tax money.
    As long as it is not profitable for corporations to do business here they will continue to do business overseas. Or, they can stay here, downsize, layoff workers, cut quality programs, and slowly be taxed to death.
  • Sharpshooter
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    The concept of bailing out failing businesses rather than using the existing systems in place to assist them set a bad precedent. The union is now part of management, the company is headed by a politically appointee and the "scam" is funded by the taxpayer dollars that will never be repaid.

    A dangerous precedent set by a dangerous President.

    I can't wait to see how negotiations with the union go over the next contract... How exactly do you negotiate with yourself?
  • Bobolinsky
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    It helped the UAW at the expense of everyone else. It helped the Obama Administration and the Democrat party by keeping the union money-laundering racket humming at the expense of everyone else.

    I'm honestly surprised that President Obama is willing to give up his first successful nationalization of a company. I guess it's worn out its usefulness since the Volt is an Edselesque Flop and the convenience of using "Government Motors" as easy shorthand for Obama's socialism.

    Oh well, There's still Government Student Loans as well as an iron grip on the banking industry thanks to Frank-Dodd which effectively centralized banking power and wealth with a handful of mega-banks that thanks to TARP are beholden to Obama.
  • Ttenneb
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    Anything the government has its hands in, the American people get screwed! But since its our money and its not coming out of their pocket they just throw it out !its always easier to spend other people's money and not you're own !
  • Politicskid
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    Obama should be held accountable for supporting this all around bad policy. Where's the media questioning him on this? The outcome of his crony capitalist policy is costing us billions!

    I think if we'd just kept our head low, the economic impact of a GM bankruptcy could have actually have been a net gain. I mean, we have Ford, and lots of foreign companies are now building factories over here.
  • Politicskid
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    @Thunderchicken My parents vowed never to buy GMs again after a terrible amount of time at the repair shop with my mom's Chevy, and the Buick and Oldsmobile my dad inherited.
  • Thunderchicken
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    @Politicskid

    I've been driving Ford work vehicles for about ten years now.(I have no choice. It's what the fleet manager buys.) In `09 I bought my first Ford truck for personal use. The ride is a little soft for my taste and the suspension travel is pretty long when off road. Other than that, no complaints so far.(I'll stiffen up the rear suspension when I get another camper.)
  • Jeff_Woehrle
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    The road of history is littered with the remains of car companies that once were but are no longer. The idea that folks would never again buy a car if Government Motors went away is absurd. This was a favor to unions, plain and simple.
  • Jeff_Woehrle
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    @ir0nw0lfe Yup. All the public sector unions are feathering their nests with the thought of federal money. It's the only way the big democrat controlled cities will stay afloat.

    Obumble can just print more money! It'll be okay, it's not real!
  • ir0nw0lfe
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    @Jeff_Woehrle I was referring specifically to the Future crafted regulation regarding the new jerk reaction on Sandy Hook . I expect to see a great deal of federal money thrown out the problem with very little to show for it . except for maybe an assault weapons ban .....
  • DARSB
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    I'm puzzled by the posts here that seem angry GM and its various employees and suppliers are still in business and making money. Aren't all of us capitalists supposed to be in favor of business?
  • Thunderchicken
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    I think it's more anger over government involvement in business. Businesses should thrive or die without the government choosing which ones do so. If GM were to have died, the market would still be there and another thriving business would have taken GM's place.
  • Malitia_Man
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    The whole "bail out" wasn't to help the economy!!! It was to help Obamas special interest!!! Same way with Solyndra!!! GM would have been better off going bankrupt!!!
  • PNWest
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    How many hundreds of thousands of families would have been put out of work had GM & Chrysler gone under like Romney wanted? There is a good chance that the US will break even or make out better from the auto company bailouts when all is said and done. Hundreds of thousands or even millions if you count indirect jobs dependent on auto companies of jobs saved. Yes it was a great investment. And for once I'll even say that GW Bush did something right when he started the ball rolling. Compare the money spent here saving jobs to the money wasted in Iraq and Afghanistan. What did we see out of that?
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