The U.S. Treasury sold $1 billion worth of GM stock this week and now has recouped $32.5 billion of the $49.5 billion it invested in the automaker. (Paul Sancya / Associated Press / April 21, 2009)
On June 8, 2013, Jerry Hirsch writes in the Los Angeles Times:
The U.S. Treasury’s deal to sell 30 million shares of General Motors Co. will recoup taxpayers another $1 billion of the bailout money the government put into the automaker back in 2009.
All told, taxpayers have recovered $32.5 billion of the $49.5 billion used to restructure the nation’s biggest automaker. The government also still owns 189 million GM shares, worth about $6.5 billion at the $34.41 share price that the Treasury got for the batch of stock it sold this week.
If the Treasury is able to liquidate its remaining stock, as it plans to do over the next 15 months, at that price or above, the government will still be short about $10 billion on its GM investment.
However, Treasury officials say that the goal of the auto industry bailout was to save the industry and jobs rather than make a profit on the investment.
The shame of government economists who have now enriched those who have “past savings” and are in a position to “invest” with their savings to purchase stock issues of GM.
Instead the government economists should have insisted that an Employee Stock Ownership Plan (ESOP) trust be established so that the employees of GM can purchase this stock, representing productive capital assets of the company, and pay for their acquisition out of the full pre-tax earnings of the respective company assets without having to devalue their labor wages and salaries or use “savings,” which, for the most part they do not have because they need every dollar they earn to support their livelihood and their families.
See http://www.cesj.org/homestead/creditvehicles/cha-esop.htm.
http://www.latimes.com/business/autos/la-fi-hy-taxpayers-loss-gm-bailout-20130607,0,3122760.story
