According to latest reports, Obama Administration is going to quickly sell the government’s remaining stake in GM rather than wait to maximize taxpayers’ investment.
The writing is clearly on the wall that the government is getting out of the GM position,” Goolsbee told reporters at a breakfast sponsored by the Christian Science Monitor. “The government never wanted to be in the business of being majority shareholder of GM. It was only to prevent a wider spillover, negative event on the economy. So we’re trying to get out of that.” said Austan Goolsbee, chairman of the Council of Economic Advisers to Detroit News.
Last year, in the initial sale, Nov. 18, the government sold 358.8 million shares, raising $11.7 billion and shrinking its stake in GM from 61 percent to 37 percent.
The Bush and Obama administrations loaned GM $49.5 billion in 2008 and 2009, and the majority of those loans were converted into equity, making the government the company’s largest shareholder.
Back in June – 2009, GM filed for bankruptcy protection after dramatic reduction of sales leading to decline in market shares. This was mainly due to spike in fuel prices contributing to reduced sale of GM’s larger gas burners like the SUVs.
In 2011, most automakers and analysts are forecasting total industry sales in the United States of about 13 million, 12 percent more than the 11.6 million sold last year. Even if gas prices rise, sales are not likely to be much lower than projected, though consumers may shift their focus toward smaller vehicles.