Treasury to Exit GM Bailout . . . At Cost of Billions to US Taxpayers

The Treasury Department on Wednesday announced plans to sell the government’s remaining shares of Detroit-based automaker General Motors in the latest in a recent string of moves by the administration to unwind controversial taxpayer bailouts stemming from the financial crisis.

Although the sale will allow the federal government to unload its investments in the auto industry company, it will almost certainly do so at a loss to taxpayers worth billions of dollars.

Treasury plans to sell its 500.1 million shares over the next 12 to 15 months, with GM buying 200 million at $27.50 per share by the end of the year. This sale will bring in $5.5 billion toward the $27 billion that the company still owes.

In an October report, the special inspector general for the Troubled Asset Relief Program estimated Treasury would need to sell the remaining 500 million shares at $53.98 per share to break even on its investment.

“This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM’s progress and our future,” GM Chairman and CEO Dan Akerson said in a statement.

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