general motors bailout Archives

Photo Credit: ERIC SEALS Detroit Free Press

The General Motors bailout may have cost the government $10 billion, but GM CEO Dan Akerson rejects any suggestion that the company should compensate for the losses.

He says Treasury officials took the same risk assumed by anyone who purchases stock.

“I would not accept the premise that this was a bad deal,” Akerson said during a question-and-answer session at the National Press Club in Washington. He also said the government’s $49.5-billion aid to GM helped save billions of dollars in tax revenue and government social services.

Akerson spoke in the wake of Treasury announcement last week that it sold its last shares in GM and Akerson’s decision to retire in January. The automaker’s board of directors named Mary Barra, the company’s first CEO, to succeed Akerson.

The speech also came as GM announced it is investing $1.2-billion in five U.S. plants, which Akerson said is a recognition that after 15 straight profitable quarters the automaker can’t rest on its success.

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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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