Obama Headed for Second GM Bailout

Forbes has some of the numbers and they just do not look good for General Motors or for America. Or for Obama.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company.  It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday.  This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share.  However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

GM is a state-owned business because the US government is its largest stockholder and cannot get out of the GM business without losing money. GM is a failed company being propped up by billions in taxpayer dollars… but GM has not stopped failing.

In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market.  For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011.

GM is still sliding, except some of the cost of the slide has been shouldered by taxpayers, but that still isn’t enough.

GM’s market share fell by 2.1 percentage points in the first three months of 2012, to a level the company hasn’t seen since 1922. GM’s 2012 share is even more striking considering that 10 years ago, GM was aiming to return to 30 percent of the American market.

2007: 23%

2008: 22%

2009: 20%

2010: 18%

2011: 19.6%

2012: 17.5%

The math here isn’t hard to do. GM is in freefall. That means Uncle Sam will have to step in for a bigger share. And the cycle will continue until there’s no more money or Obama is out of office.

  • https://www.facebook.com/mic.lawler Mic Lawler

    Another Obama success story !

    • https://www.facebook.com/gidget1966 Gwen Scott

      Yep more tax dollars, they are printing them 24/7 I think Please NO OBAMA in NOV. This man is so clueless on business. They already in Chapter 11 NOW!!! keep pouring it down a deep dark hole.

    • turdy

      you blindly pointing fingers. This garbage started with Bush and it's going to keep happening as long as people think a puppet is their real administrator. This is not Obama's choice – HE WORKS FOR POLICY MAKERS AND THE PEOPLE THAT FUNDED HIS CAMPAIGN SO HE COULD GET IN OFFICE. The senior management of GM wanted this, but are you blaming them? The senior executives at AIG supported the bailouts. Are you talking trash about them? NO because you think the president was the one that came up with it and ratified it. And guess why… because tv says blame the president – rather than trying to use critical thinking skills and consider all possible beneficiaries. The people gaining from this had more to do with making it happen then the man signing the acts – he's busy getting puppeteered around the world doing PR for the Global Nation, he’s never had time to write “Obama Care” acts and bailout plans.

  • rjr

    But…but…but….I thought it was doing so well.

  • oldtimer

    What happened to GM is alive…..

  • kafir4life

    Whenever possible, avoid union made goods and services. Buying from union run companies is the same as making a direct donation to President Stinky (BO). Union members are in lockstep, can't think for themselves, and will vote for whoever the leadership tells them to, including Stinks.

  • Rob Peterson

    This is Rob Peterson from GM Communications.

    Policital persectives aside, the facts of GM's recent financial performance differ from what is stated above. With over $30 billion in cash and cash equivalents, 10 consecutive quarters of profit and minimal debt, the notion that GM "is in a freefall" is opinion and differs from rating agencies Moody's, Standards and Poors and Fitch's who recently upgraded GM's credit rating to one grade below investment.

    Additionally, the Forbes article referenced by the author above is dated 8/15/2012. GM's stock price is currently trading at roughly $24 – a nearly 20 percent increase in the past two months. (Note: for comparison, YTD, Ford's stock price is down over 6 percent, while GM's is up over 14 percent.) When the Government decides to sell is anyone's guess – they are one several hundred thousand shareholders.

    The Associated Press has a different perspective on the facts of the auto bailout http://www.businessweek.com/ap/2012-10-14/why-it-

    Thanks
    Rob

    • http://www.facebook.com/jeff.via.5 Jeff Via

      Pay the American People back if you are doing so well. Buy all of OUR Shares and show us the real GM, quit being propped up by the Government, or is that what Obama wants you to do. Maybe the reporting of the numbers are a bit skewed on your side, after all, remember Enron?

    • http://www.facebook.com/jeff.via.5 Jeff Via

      Oh, and guess what. Ford didn't take any bailout money, they had smart people in place that knew how to run a business. Should have went out of business, GM stopped making decent cars in 1969.

  • riverboatbill

    GM : Government Money.