Both General Motors (NYSE:GM) and the Obama administration have taken a lot of heat for orchestrating the $50 billion or so bailout of America’s largest automaker that kept it out of bankruptcy. That was in 2009, and since then, the federal government has been selling off its position in General Motors.
It’s good news for taxpayers, then, that GM’s stock — fueled by a successful year of new model releases and strong sales — is at its highest levels since its initial public offering three years ago, as the stocks closed at $39.11 on Monday. Its previous closing high was $38.98 on January 7, 2011, The Detroit News reports. Since Monday, the stock has breached $39.50 as of midday trading on Wednesday.
Just last month, the U.S. Treasury — which is holding the position in the automaker – said that it has plans to sell off the rest of its stake in General Motors by December 31, a full three months earlier than was announced previously. The government was looking at the first quarter of next year as its original deadline.
With the remainder of its federal stake sold off, GM may finally be able to shake the “Government Motors” moniker that it was given after the bailout. Critics of the action reason that the company would have been able to restructure itself without federal intervention, and that the government should — as policy — stay out of these sorts of matters to ensure a free market.
However, supporters of the government intervention assert that if the company was allowed to collapse (and presumably be unable to restructure itself), the resulting shockwave throughout the company and the automaker’s supplier network would pose a larger burden in the form of unemployment, lost revenue from General Motors’ international operations, and so on.
As an added bonus for investors, the federal exit would allow GM to resume issuing dividends, which it was prohibited from doing under the terms of its rescue. It would also allow the company to compensate its executives as it pleases, once the federal restrictions are removed.
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