The Treasury Department announced it has sold its final block
of General Motors stock effectively closing the book on its 2009 bailout of the
auto industry.
Treasury Secretary Jack Lew announced the final stock sale
late Monday afternoon, saying that Treasury ended up recouping $39 billion
through the sale of shares, dividends and loan repayments since 2009. The
timing of the stock sale is in keeping with plans announced in January. But the government pumped $49.5
billion into GM to help it get through a bankruptcy reorganization.
Treasury also came up an estimated $1.3 billion short in its bailout of Chrysler Group.
Although there were taxpayer losses, the bailout was
necessary. Lew said that if both companies had gone out of business in 2009, it
would likely have caused widespread business failures among suppliers across
the country and even forced other automakers such as Ford Motor Company into
bankruptcy, due to a lack of auto parts. He said the government also would have
been on the hook for pension payments for retired autoworkers that were backed
by the Pension Benefit Guaranty Corp., a federal agency.
The government initially had a 61% stake in GM when the
company emerged from bankruptcy in 2009 and started to sell that stake with
GM's November 2010 initial public
offering.
GM shares
are up more than 40% so far this year. The company has earned nearly $20
billion in net income since 2010, the year it returned to profitability after
emerging from bankruptcy. GM says it has invested $8.8 billion into its U.S.
plants since 2009, which resulted in the company either adding or maintaining
25,500 jobs at those facilities.