An announcement from the U.S. Department of the Treasury on Thursday made the government’s expectations regarding involvement in the General Motors Company (NYSE:GM) clear. Back in 2009 the government made a $40.5 billion loan to the automaker, giving it a much needed boost it during the financial crisis. As of Thursday, the Treasury Department says it has sold 70.2 million shares of GM stock — leaving it with a final plan to sell the remaining 31.1 million shares left.
While it stipulates that the sale of shares will be dependent on market conditions, the Treasury Department says it plans to be completely free of GM shares by years end. In an earlier October announcement the Treasury estimated March of 2014 would show the department fully removed from GM’s finances.
“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. 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,” said Tim Bowler, the treasury deputy assistant secretary.
“Our actions have enabled the industry to rebound. 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,” said Bowler. Chrysler was given $12.5 billion in TARP investment, but the Treasury had closed out of its loan to the automaker back in 2011. According to the Treasury press release it has gathered $38.4 billion back for taxpayers. Further, it has collected $431.4 billion in total from all of its Troubled Asset Relief Program investments.
“While the U.S. Treasury’s equity stake draws to a close, our work to transform GM continues. We’re making great progress in our efforts to make the most of this second chance by building outstanding cars and trucks, creating jobs, and reinvesting in our country,” said GM’s press statement.
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