Taxpayers to Take $24 Billion Loss on Government Motors

GM is alive and it only cost the taxpayers 24 billion dollars in losses.

“The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock’s closing price on Tuesday,” the Detriot News reports.

However, the break even price — the price that GM would need to pay for each share in order to pay back the money the government put in to the company —was $53 a share.

And since that’s never going to happen, enjoy the 24 billion dollar company you no longer own, but that you paid for anyway.

Don’t assume for a moment that the bleeding is limited to 24 billion dollars.

The Treasury has said it expects to lose $24.3 billion on the $85 billion auto bailout.  Treasury also holds a 74 percent stake in Ally Financial Inc., the Detroit-based auto lender, as part of a $17.2 billion bailout.

Last year, the government exited Chrysler Group LLC and booked a $1.3 billion loss on its $12.5 billion bailout. The government had planned an initial public offering of Ally in 2011 but put it on hold because of market conditions. Any IPO won’t occur until after Ally’s troubled mortgage unit ResCap completes its bankruptcy restructuring.

Hostess, by way of comparison, had 1.4 billion in liabilities, most of that was to the union pension fund. It also had 2.5 billion dollars in annual revenues and employed 19,000 people. But some unions are just better connected than others.

  • richard ahern

    Howlng are the American put up with this misuse of Taxpayers dollard

  • JacksonPearson

    In all appearances, Government General Motors have an endless, and direct money pipe line to the white house. The epitome of socialism.

  • jakespoon

    In the administration this will be touted as a success. Only a 24 billion loss.

    • objectivefactsmatter

      No. They'll focus entirely on the revenue generated as if they made a profit. They're geniuses at lying to each other. Liberals will be willfully deceived and celebrate their big success.

  • JacksonPearson

    Socialism at it's best. /S

  • JacksonPearson

    Mitt Romney was correct, GM should have first gone into bankruptcy.

  • Mary Sue

    GM will be the Skeena Cellulose of the USA.

  • κατεργάζομαι

    President Obama's attack, during the final debate, on Mitt Romney's critique of the auto industry bailout was 100% false, i.e., a bald-faced lie.

    When Romney said, during the debate, that in 2008 he favored a managed bankruptcy for Detroit's auto makers, with federal guarantees for post-bankruptcy financing, Obama directly claimed this was a falsehood, repeatedly saying, "Check the record."

    Here's the truth about Romney on GM: Obama lied Read more:

    Obama attempted to thwart him using the typical leftist method: lie through your teeth, and hope no one notices. Let's hope enough people are noticing these days.

    Post script: Obama can lie because 49% are either on the gravey train, – or ride the Metro Bus!.

  • κατεργάζομαι

    In the government takeovers of GM and Chrysler, government trampled long-established contract and bankruptcy laws when they ripped off secured bondholders. There is an "F"-word with 7 letters, that ends with "-ism" to describe this act.