US exits GM stake, taxpayers lose $10bn

Published Dec 10, 2013

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Washington - The US government sold its last shares of automaker General Motors Co on Monday, marking an end to a historic bailout of one of America's most storied companies.

The sale leaves taxpayers short about $10 billion of the funds that the Treasury sank into the automaker in 2009.

“With the final sale of GM stock, this important chapter in our nation's history is now closed,” Treasury Secretary Jack Lew said.

Washington came to the rescue of Detroit during the darkest days of the country's 2007-09 financial crisis, as the nation was sinking further into what would become its deepest recession since the Great Depression.

The money pumped into the auto industry came from a $700 billion pool of funds Congress had assembled to shore up the banking system and fight a growing panic on Wall Street.

Taxpayers could still turn a profit from the rescue efforts, despite losses on programs to help housing and autos.

The government also took a loss of just over $1 billion on its investments in Detroit automaker Chrysler.

Taxpayers remain intertwined with GM's former lending arm, Ally Financial Inc.

But the bailout helped Detroit automakers return to profitability, and a study released on Monday by the Center for Automotive Research said it saved 1.5 million US jobs and preserved $105.3 billion in personal and social insurance tax collections.

Still, the crisis humbled one of America's biggest companies and the powerhouse of the country's industrial Midwest region.

“We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,” GM Chairman and chief executive Dan Akerson said in a statement.

The company has carried a certain stigma since taking $49.5 billion in government money four years ago.

“They can finally put 'Government Motors' in the rear view mirror, and that's an important step for consumers and for the company,” said Matthew Stover, an auto analyst at Guggenheim Securities. - Reuters

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