Government dumps GM stock, $10.5 billion loss to taxpayers

The federal government announced that it will sell the last of its stock in General Motors for a loss of around $10.5 billion dollars. The government initially acquired 912 million shares of GM, which at the time was 60.8% of the company in exchange for offering them $49 billion in cash. The government will reportedly recoup only around $38.4 billion.

Treasury Deputy Assistant Secretary Tim Bowler said that the loss is offsetting the worse calamity that might have resulted from the loss of one million jobs. “Had we not acted to support the automotive industry, the cost to the country would have been substantial – in terms of lost jobs, lost tax revenue, reduced economic production, and other consequences. Our actions have enabled the industry to rebound,” Mr. Bowler said.

CEO of Berkshire Hathaway Warren Buffett praised the auto bailout saying,

“If you go back to March 6, or something like that, in 2009, I was on CNBC, and that was the day before the Dow hit a low, and I got asked about whether the government ought to move in and give help to the auto companies,” Buffett remembered. “And I’m glad to say I called that one right. It was huge, the way they came back. It’s amazing, all three of them. When you think of the ripple effect with the suppliers and everything else, it would have been a disaster if the government hadn’t come in. You’ve got to give credit to the industry for … making the most of it.”


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