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GM Pushing for Government to Sell Ownership Stake

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Tuesday, 18 September 2012 13:13

Written by Cliff Levine

Between TARP and the second auto bailout pushed by President Obama, General Motors (GM) has faced tough scrutiny from car buyers and Americans in general.  The bailout was not popular, despite the lies propagated by the Obama campaign, which want the public to believe Obama single-handedly saved the company.  And the bailout didn't stop GM or Chrysler from going bankrupt, which is how it was pitched to work.  The entire situation became beneficial to one particular group: the United Auto Workers union.  Now, GM is pushing the government to sell their stake, but the government is telling them no.

For GM to get back to prosperity, they need the U.S. government removed from their stake of owners.  Right now, GM is being subsidized by taxpayers.  We're subsidizing its losses, particularly from the Chevy Volt and the costs of the massive health care and pension plans of the union thugs.  Remember, by going through the "special" and borderline illegal bankruptcy plan, the labor unions weren't forced to renegotiate their rates.  That was planned.

Many car fanatics are not happy with the government's role and have shunned the company for the past three years.  The White House has been directly involved with GM, including their decision to produce the fledgling Chevy Volt.  They even capped salaries, which ends up hurting GM because they need to attract the best talent to prosper.  The government's involvement has been nothing short of a disaster, even though the White House and Obama campaign propaganda machines want the public to believe GM could not have been successful without their involvement.

Here are more details from CBS MarketWatch:

The Treasury Department is resisting General Motors' push for the government to sell off its stake in the auto maker, The Wall Street Journal reports. Following a $50 billion bailout in 2009, the U.S. taxpayers now own almost 27% of the company. But the newspaper said GM executives are now chafing at that, saying it hurts the company's reputation and its ability to attract top talent due to pay restrictions. Earlier this year, GM presented a plan to repurchase 200 million of the 500 million shares the U.S. holds with the balance being sold via a public offering. But officials at the Treasury Department were not interested as selling now would lead to a multibillion dollar loss for the government, the newspaper noted. 

This is a good move by GM, as they need to divorce themselves from the government.  Sales at GM have suffered because of the government's involvement.  The loss is a realistic concern for the government, however, it's unlikely that GM would recover and pay back these losses in the near term.

Getting the government and labor unions out of GM's management is the only way this American icon can recover.

Cliff Levine is a contributing editor for Habledash.