Treasury to Exit General Motors Stake by Year's End

Before you go, we thought you'd like these...
Before you go close icon

General Motors headquarters. Photo credit: General Motors

Shares of General Motors were surging over 3% in early trading after the U.S. Treasury Department said it expects to exit its position in Detroit's largest automaker by the end of the year. The previous plan called for the Treasury's exit to be by March 2014 and investors are clearly cheering the early exit.

"Treasury's investment in the American auto industry was part of President Obama's broader response to the financial crisis, and it helped save more than one million jobs," said Treasury Deputy Assistant Secretary Tim Bowler in a statement. "Had we not acted to support the automotive industry, the cost to the country would have been substantial -- in terms of lost jobs, lost tax revenue, reduced economic production, and other consequences. ... All three American automakers are now profitable, and more than 340,000 new auto jobs have been created since GM and Chrysler emerged from bankruptcy in 2009."

Today the Treasury announced it had completed the sale of 70.2 million shares of General Motors common stock and it would launch a final plan for its remaining 31.1 million shares. Although the early exit depends on market conditions and trading volume, the Treasury still expects to fully exit by the end of the year. GM shares closed yesterday at $37.69.


So far, the Treasury has recouped a total of $38.4 billion for taxpayers from the overall General Motors investment. But that leaves a shortfall of roughly $10 billion and the Treasury's exit alone may not be enough to quiet the "Government Motors" name-calling for some time. Still, this is a huge step forward for the new General Motors, which is rebounding from its ugliest chapter in history.

link

The article Treasury to Exit General Motors Stake by Year's End originally appeared on Fool.com.

Fool contributor Daniel Miller owns shares of General Motors. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners

20 Folks Recall Shocking Interview Moments That Made Them NOT Want the Job 20 Folks Recall Shocking Interview Moments That Made Them NOT Want the Job
Rescuer Sees Bumps All Over This Dog's Skin - Then X-Rays Reveal The Tragic Story Rescuer Sees Bumps All Over This Dog's Skin - Then X-Rays Reveal The Tragic Story
Man Felt Something Inside His Nose - But What Doctors Pull Out Leaves Everyone Stunned Man Felt Something Inside His Nose - But What Doctors Pull Out Leaves Everyone Stunned