Treasury sells off the last of its GM stock at a $10 billion taxpayer loss

posted at 7:41 pm on December 9, 2013 by Erika Johnsen

And with that, it’s “Government Motors” no more. At least, not officially.

U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today.

The taxpayer loss on the GM bailout finishes at $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stock, and had put $49.5 billion of taxpayer money into the GM bailout. …

GM and Chrysler both went through government-scripted Chapter 11 bankruptcy reorganizations. Treasury put $12.3 billion into Chrysler and recovered $11.13 billion of that.

The big argument by Obama officials and bailout apologists everywhere, of course, is that on net evaluation the $10 billion direct hit taxpayers are taking on this is well worth the jobs and economic infrastructure that the federal government “saved” on behalf of the Detroit auto companies, and ergo, this was a wise move and big subsequent win for the American economy.

“Inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production,” Treasury Secretary Jacob Lew said in a statement announcing that Treasury had sold all its remaining shares.

…But, we can never really know that, can we? Certainly the implosion of these companies would have caused a lot of very real material pain at the outset, but creative destruction and the opportunity to fail are as much a part of an economy’s long-term success as anything else. The precedent for massive corporate bailouts is now set, and General Motors is the lucky benefactor of competition deliberately denied from other companies, global and domestic, who made better business decisions and/or offered a superior product. Obama’s supporters are quick to point to “the rescue” of the U.S. auto industry as one of his greatest presidential achievements (which, to me, is an indicator of how tough it must be for them to scrape together a list of his presidential achievements, but I digress), but this entire situation is one of the many means through which President Obama has opened the door to Big Business rent-seeking and cronyism capitalism at the expense of both the Little Guy and the American economy at large.


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Ah, yes – think of all of the jobs ‘saved or created’ as a result! Rejoice! But save some confetti, because… they’ll be back, taxpayers, oh yes – they’ll be back.

Midas on December 9, 2013 at 7:44 PM

. . . my confetti is suspiciously green.

Axe on December 9, 2013 at 7:46 PM

I guess maybe we as taxpayers should demand our dividends in cars. I want a new Corvette!

cornbred on December 9, 2013 at 7:46 PM

But remember….they’re still in the bankrupt city of Detroit.

jaywemm on December 9, 2013 at 7:48 PM

Only $10 billion for gaining the privilege of being able to buy a Volt…I’d say that’s money pretty well spent. /s

Bandit13 on December 9, 2013 at 7:49 PM

If you like your car company you can keep your car company.

For now.

wolly4321 on December 9, 2013 at 7:49 PM

Excuses and yet more excuses. A Ten Billion Dollar loss is a Ten Billion Dollar loss, period.

If I didn’t go to Kroger today and buy that pound of hamburger instead of using the left over pork chops I had for dinner, I would have put 3 people out of work. Same theory.

Johnnyreb on December 9, 2013 at 7:50 PM

The taxpayer loss on the UAW bailout finishes at $10.5 billion.

Fixord!

jukin3 on December 9, 2013 at 7:51 PM

Just how much was stolen from the bondholders? For Instance, if GM was valued at 12 Billion before bankruptcy, and the original GM bondholders got 10%, then it cost Americans another 10.8 billion that no one ever seems to account for.

Mostly retirement and mutual funds, too, I bet.

West on December 9, 2013 at 7:51 PM

It will always be “Government Motors” to me. I spit on that brand.

RushBaby on December 9, 2013 at 7:52 PM

So the whole thing ended up being nothing more than a 10 billion dollar transfer of wealth from the taxpayers to the auto unions. Nice racket.

Tomolena1 on December 9, 2013 at 7:52 PM

Let’s take a small walk down memory lane.

The UAW was demanding ~10 billion from GM in early 2009.

The UAW received ~10 billion in the GM reorganization handled by the corrupt Obama administration.

5 years later, the government admits that it has ‘lost’ ~10 billion on the GM deal.

WHERE is the surprise?

Freddy on December 9, 2013 at 7:52 PM

The only part the government cared about was GMAC.

It is a financial institution that also, as a side-light, happens to produce cars.

And it all should have been headed directly to bankruptcy court for re-organization and cost cutting.

ajacksonian on December 9, 2013 at 7:52 PM

PS: Do not forget the billions in TAX BREAKS that GM will continue to receive over the next 5 years. (That was a 10 year kickback scheme.)

Freddy on December 9, 2013 at 7:54 PM

West on December 9, 2013 at 7:51 PM

Add that to what the federal reserve has pumped into the market to get GovMtr to get where it is at.

Easily this cost us and future generations $100 billion.

jukin3 on December 9, 2013 at 7:54 PM

But Tampon Girl said Obama saved the Auto Industry! Does she know she paid $10Billion for it?

ctmom on December 9, 2013 at 7:54 PM

The only part the government cared about was GMAC.

It is a financial institution that also, as a side-light, happens to produce cars.

And it all should have been headed directly to bankruptcy court for re-organization and cost cutting.

ajacksonian on December 9, 2013 at 7:52 PM

That was renamed as ALLY Bank and has received big cash infusians courtesy the Federal Reserve as it was declared TBTF!

Freddy on December 9, 2013 at 7:56 PM

GM will be back on the government teat in a few years. The systemic problems that plagued GM that resulted in the last bankruptcy will cause it again. Bankruptcy is supposed to be a chance to clean house, Obama’s intervention prevented that from happening.

TulsAmerican on December 9, 2013 at 7:59 PM

That was renamed as ALLY Bank and has received big cash infusians courtesy the Federal Reserve as it was declared TBTF!

Freddy on December 9, 2013 at 7:56 PM

PSS: They notified the Fed they are getting into investment banking in the near future! What could possibly go wrong?

Freddy on December 9, 2013 at 8:00 PM

Oops. Bondholders were owed about 30 Billion – they got 3 billion.

Another 27 billion dollars that’saving’ GM (i.e., gifting it to the unions) cost Americans.

West on December 9, 2013 at 8:00 PM

GM will be back on the government teat in a few years. The systemic problems that plagued GM that resulted in the last bankruptcy will cause it again. Bankruptcy is supposed to be a chance to clean house, Obama’s intervention prevented that from happening.

TulsAmerican on December 9, 2013 at 7:59 PM

I read on IBD last month that GMAC (or whatever they call it now) is once again giving new car loans to people with credit scores below 500. Seriously, nothing good can come from that.

Johnnyreb on December 9, 2013 at 8:03 PM

That was renamed as ALLY Bank and has received big cash infusians courtesy the Federal Reserve as it was declared TBTF!

Freddy on December 9, 2013 at 7:56 PM

With an ALLY like that, who needs enemies, huh?

ajacksonian on December 9, 2013 at 8:09 PM

What was that Joe Biden said a while ago? osama bin laden is dead and GM is alive? Now GM is dead and Al Qaeda is alive.

deimos on December 9, 2013 at 8:10 PM

The only thing King Barack “rescued” was the UAW.

GarandFan on December 9, 2013 at 8:12 PM

GarandFan on December 9, 2013 at 8:12 PM

Yes, and screwed over the shareholders and bondholders. I’ll never buy a GM car. But to be fair, I wouldn’t have bought one without a bailout, because 97.2 percent of them suck eggs.

Attila (Pillage Idiot) on December 9, 2013 at 8:15 PM

Worth every penny to get to close all the republican donor dealerships.

Murphy9 on December 9, 2013 at 8:30 PM

Total cost to the taxpayers: $30-ish billion. ThirtyBillionDollars. To the United Auto Workers communist/mobster union.

Every time you buy someone else’s car … send a nice note to the UAW and GM and thank them for making your decision so much easier.

(Hot Tip: the delightful Toyota Tacoma mid-sized pick up is now made in the U.S. by non-union labor in San Antonio, Texas.)

Jaibones on December 9, 2013 at 8:33 PM

And the corrupt bailout insured I will never by a GM vehicle ever. They will always be Government Motors to me.

txhsmom on December 9, 2013 at 8:33 PM

US Tax Payer Lootery(s)!

Typical Liberal Taxis/Spendis!!

canopfor on December 9, 2013 at 8:33 PM

So, the City of Detroit can go through the bankruptcy process but the automakers were too precious? Or, was it the union membership that made them so special to His Royal Highness?

IndieDogg on December 9, 2013 at 8:36 PM

Treasury sells off the last of its GM stock at a $10 billion taxpayer loss

but on the bright side, it’s probably somebody’s $10 billion gain!

Dr. ZhivBlago on December 9, 2013 at 8:46 PM

I’d love to see a run down of WHO actually bought that stock.

KMC1 on December 9, 2013 at 9:06 PM

should have gone through structured bankruptcy.

dmacleo on December 9, 2013 at 9:30 PM

Total cost to the taxpayers: $30-ish billion. ThirtyBillionDollars. To the United Auto Workers communist/mobster union.

Every time you buy someone else’s car … send a nice note to the UAW and GM and thank them for making your decision so much easier.

(Hot Tip: the delightful Toyota Tacoma mid-sized pick up is now made in the U.S. by non-union labor in San Antonio, Texas.)

Jaibones on December 9, 2013 at 8:33 PM

WOOOOOOOOOOOOOOOOO HOOOOOOOOOOOOOOOOOOOO!!!!

Not so proud member of the UAW. lol

Murphy9 on December 9, 2013 at 9:36 PM

Another glorious Pyrrhic Victory for Obama.

Wallythedog on December 9, 2013 at 9:39 PM

Ahhh… The Much Despised “Corporate Welfare”

Where are the downtwinkles from Occupy?

blammm on December 9, 2013 at 9:46 PM

Lew had revised an earlier draft of the statement from” eleventy billion”!

socalcon on December 9, 2013 at 10:24 PM

Ten billion here, ten billion there, and pretty soon you’re talking about real money.

Hayabusa on December 9, 2013 at 10:46 PM

“The taxpayer loss on the GM bailout finishes at $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stock, and had put $49.5 billion of taxpayer money into the GM bailout.”

Democrats, union bosses, relatives, and community organizers rejoice at the “spreading of the wealth.”
They seem kind of silent about where wealth comes from.
I guess it’s just “Obama Money.”
Like “Obama Phones,” the cash just appears…

The corruption in this country is beyond intolerable.
We are a banana republic on steroids.

shorebird on December 9, 2013 at 11:22 PM

And with that, it’s “Government Motors” no more. At least, not officially.

Not officially indeed! Obama has stacked the GM Board and executives with his fellow progressives and didn’t Obama give most of GM to the union(s)?

It will be decades, if ever, before GM is a proper run corporation.

RJL on December 9, 2013 at 11:37 PM

Recently replaced a GM truck. I liked the GM truck purchased a decade ago. I refused to even look at buying a new GM vehicle. Bought a foreign made SUV instead. I will never again buy a GM product.

Over50 on December 9, 2013 at 11:42 PM

Let’s take a small walk down memory lane.

The UAW was demanding ~10 billion from GM in early 2009.

The UAW received ~10 billion in the GM reorganization handled by the corrupt Obama administration.

5 years later, the government admits that it has ‘lost’ ~10 billion on the GM deal.

WHERE is the surprise?

Freddy on December 9, 2013 at 7:52 PM

That’s called the Ten Billion Card Monte in Gubmint parlance. The unions did go all in to help elect his Excellency so it’s only reasonable that they expect something return. Now that it paid off for them, you can bet they will be back at the trough soon enough.

ghostwalker1 on December 10, 2013 at 12:01 AM

WOOOOOOOOOOOOOOOOO HOOOOOOOOOOOOOOOOOOOO!!!!

Not so proud member of the UAW. lol

Murphy9 on December 9, 2013 at 9:36 PM

Hahahahahaha. Born in Saginaw, Michigan. It pains me to hate GM. I have GM in my DNA. But when they became a supplier to the UAW, I bailed out. Eff ‘em.

Jaibones on December 10, 2013 at 12:06 AM

So wait- GMAC became a bank on its own correct? They spun it (and the money owed TO it) into “Ally Bank”.

Which, if I’m not wrong, is still owned entirely by the American Taxpayer.

We own a ton of debt beyond just the loss we took on GM. They’ve swept all kinds of cash under the rug, called it “Ally Bank”, and don’t want you to know that it’s actually YOUR’S.

We be in the bankin’ bidness.

Ya. Hoo.

ChipDWood on December 10, 2013 at 1:36 AM

I’ll give you three letters to describe where that $10,000,000,000 is going – UAW.

At last check, the UAW was on track to turn $20 billion in liabilities GM owed it into $30 billion in cash.

Steve Eggleston on December 10, 2013 at 7:55 AM

That was renamed as ALLY Bank and has received big cash infusians courtesy the Federal Reserve as it was declared TBTF!

Freddy on December 9, 2013 at 7:56 PM

The Treasury still owns over 75% of Ally, and is showing absolutely no interest in letting it go.

Of course, also at last check, the Treasury was over $15 billion in the hole on that portion of the auto bailout.

Steve Eggleston on December 10, 2013 at 8:01 AM

And with that, it’s “Government Motors” no more. At least, not officially.

Not officially indeed! Obama has stacked the GM Board and executives with his fellow progressives and didn’t Obama give most of GM to the union(s)?

It will be decades, if ever, before GM is a proper run corporation.

RJL on December 9, 2013 at 11:37 PM

The UAW still owns about 20% of GM common stock as well as a few billion dollars’ worth of senior preferred stock “earning” 9% annual dividends GM can’t buy back until the end of next year.

Steve Eggleston on December 10, 2013 at 8:03 AM

(Hot Tip: the delightful Toyota Tacoma mid-sized pick up is now made in the U.S. by non-union labor in San Antonio, Texas.)

Jaibones on December 9, 2013 at 8:33 PM

As is the full-size Tundra.

Steve Eggleston on December 10, 2013 at 8:05 AM

(Hot Tip: the delightful Toyota Tacoma mid-sized pick up is now made in the U.S. by non-union labor in San Antonio, Texas.)

Jaibones on December 9, 2013 at 8:33 PM

Also of note, the Tacoma utterly destroyed the domestic Mid-size truck segment (and rightfully so I might add.)

Gatsu on December 10, 2013 at 8:16 AM

Just how much was stolen from the bondholders?
–snip–

Mostly retirement and mutual funds, too, I bet.

West on December 9, 2013 at 7:51 PM

And don’t forget the stockholders. They didn’t even get pennies on the dollar, and most of them were NOT “fat cats”, but small investors planning for retirement.

Kevin K. on December 10, 2013 at 8:17 AM

And the corrupt bailout insured I will never by a GM vehicle ever. They will always be Government Motors to me.

txhsmom on December 9, 2013 at 8:33 PM

Same here (and not just because I’m a you-know-whatted over stockholder of the late General Motors).

Kevin K. on December 10, 2013 at 8:20 AM

Every time you buy someone else’s car … send a nice note to the UAW and GM and thank them for making your decision so much easier…….
Jaibones on December 9, 2013 at 8:33 PM

-
Indeed. I am looking to buy a new car this month. As a former GM shareholder & taxpayer, never GM again.

diogenes on December 10, 2013 at 8:46 AM

I didn’t see anything in the linked article about the government sell-off.
Why now? As in, why did the government sell, and take the loss, now, instead of waiting a bit longer if the trend of the stock prices were indeed improving?

Kevin K. on December 10, 2013 at 8:51 AM

We have loved our Corvettes and Suburbans but sadly will NEVER buy a GM vehicle again.

SandyToes on December 10, 2013 at 9:33 AM

What a deal. If you were a shareholder before the bailout and a tax payer afterwards, you got screwed twice by dear leader. That should make up for somehow getting him to call his signature achievement a substitute vile name. It really does put Maddof, Enron and MF Global to shame. Guess those on the left don’t mind being taken to the cleaners by a govt big enough to confiscate everything they have.

Kissmygrits on December 10, 2013 at 9:34 AM

Who bought the stock? Someone got a sweetheart deal.

Kissmygrits on December 10, 2013 at 9:35 AM

The true cost is north of $60 Billion: nobody is talking about the $50 Billion or so previously stolen from the stockholders…which include practically every person who has a pension plan.

landlines on December 10, 2013 at 11:49 AM