Can Taxpayers Recoup GM Bailout Money?

A government watchdog says the U.S. Treasury would have to sell its General Motors stock for $133.78 each to get back the nearly $50 billion it spent bailing out the Detroit automaker.

Special Inspector General for bailout funds Neil Barofsky revealed the figure in an Aug. 30 letter to Republican Sen. Charles Grassley of Iowa. The letter was obtained by The Associated Press on Wednesday.

He says the government gave GM $49.5 billion to stay in business. GM repaid $6.7 billion and the rest was converted to preferred shares and a 61% stake in the company. The government plans to start selling its GM shares in mid-November.

Barofsky told Grassley he would look into the steps taken to make sure taxpayers get their money back.


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Gumby

GM just chose to join the Rust Bowl club started in 1980's when steel mills were shuttered.

September 28 2010 at 3:13 AM Report abuse rate up rate down Reply
frank1946

Chrysler paid back it's loan in 26 mos. What is going on here ?

September 23 2010 at 6:38 AM Report abuse rate up rate down Reply
Gumby

What is so unusual about General Motors is the number of float shares it carries . GM had only 500 million shares outstanding but was authorized to have up to 2.5 billion shares. GM never used the remainder of 2 billion shares to sell to investors during the better days. In comparison to Ford Motors' 3.3 billion shares already floating, GM chose bankruptcy after decades of assets sales and spinoffs of unrelated divisions such as EDS (Electronic Data Systems), Directv ( satellite TV company previously called Hughes Electronics) a major car rental fleet operation under a well known name (Avis or something) and Delphi (automobile part supplier), Locomotive , Frigidaire, Isuzu partership, etc. GM once hit over $90 a share in early 2000's but never split or sell additional authorized shares at all. These are the facts that Senator Grassley ought to look hard at and establish the meaning of that strange isolation from issuing additional shares as if GM already saw the writing on the wall long before the bankruptcy proceedings. It appears to me as a previous GM shareholder that GM management and UAW big wigs had the scheme going on. GM had revenues of around $200 billion for years which is plenty enough to service additional shares. GM chose to use taxpayers' money over shareholders' additional capital. GM chose to be a ward of the government after all. I dont believe that GM is afforded the opportunity to return to the capital pool so suddenly (only one year after bankruptcy) through an IPO offering. GM shareholders might have assumed that GM would use its extra 2 billion shares to raise needed capital from time to time. GM shareholders were led to believe to the last day that GM would never file for bankruptcy. I repeat, why so few shares (500 million shares) against GM's huge annual revenues despite periodical sales of assets and spinoffs. GM must be breaking some laws under the SEC code. GM also stopped paying $5 annual dividend back in 1989 and continued to pay much smaller dividends even through better years since 1989. GM and UAW must have conspired many wrong actions against GM shareholders for so many years. I have reason to believe that GM will continue to practice dishonest fiducary duties against future GM shareholders in the future. GM is a plain crook after all. Sell GM to VW or China or even to GM gearheads here in America and let them take care of GM all by themselves not taxpayers or new IPO shareholders, I urge you not to entertain the idea of an IPO at all. It is a damn shame !!

September 23 2010 at 3:13 AM Report abuse rate up rate down Reply
krp2

Obama has no intention of relinquishing control of GM nor do the Unions. This is the new Postal Service type government program for which even more government money is going to be dumped!!! Look at Amtrak. That too was not supposed to be forever but look how long the government has 'owned" that and look at how much money it loses due to ineffecient labor practices imposed by the union!

September 22 2010 at 11:17 PM Report abuse rate up rate down Reply
bridget1t

THE ANSWER TO THE HEADLINE...NO WAY

September 22 2010 at 9:49 PM Report abuse +1 rate up rate down Reply