U.S. Treasury decided to sell the very last of their stake in General Motors recently, ending a 4-year long run of government ownership in the nation’s largest automobile company. No one is complaining because the ownership has cost taxpayers approximately $10.5B until now.
A statement from the government has however mentioned that it has recovered approximately $39B from the original investment of $50B in GM. Dealers and company executives believe that the label GOVERNMENT MOTORS has done more harm than good to the reputation of the company and has affected the sales negatively. As such, they have breathed a sigh of relief as the last of the shares went on sale.
GM CEO has however thanked the US government for coming to their rescue just in time and said that they want to reap the complete benefits in the coming times. With a new CEO at the helm from the coming year, the prospect surely seems bright for the automakers. The present condition of General Motors reflects positively upon the domestic automobile industry. It signifies job creation, continued investment, and innovation.
The focus according to the company is now completely on the customers with emphasis on business transformation. According to the company sources, government’s exit will give their sales a short-term lift with long-term positive repercussions. They believe that one of the most put off sections of the market due to the Government Label were the truck buyers. With the recent changes, the automakers now will be able to woo them back.
According to the Treasury Department, the selling of the last GM share marks the final leg of administrative efforts towards supporting broader economy by helping the US auto industry. Since 2009, when GM shed the mantle of bankruptcy, the industry has given rise to 370,000+ new jobs. The three major US auto giants are presently competitive, growing, and profitable boding well for the nation’s economy.
Close at the heels of the government exit from GM shares, the stock prices have risen significantly. The company resumed public trading almost 3 years ago and now it has reached the highest levels at $41.16 with $40.90 at closing. In the latter part of 2008, launching of GM bailout happened where the government loaned approximately $40B to the company. In exchange, they took almost 61% in equity stake.
Today, this investment is paying off quite appreciably. As President Obama said, today the American Automakers are BACK!
