How Much GM Stock Does the US Government Own?

In the wake of the 2008 financial crisis, the U.S. government stepped in to rescue the American auto industry, including General Motors (GM). As part of the bailout, the government acquired a significant stake in the company. But how much GM stock does the US government own today? Let's delve into this topic to get a clearer picture.

The Bailout and Acquisition of GM Stock

After the collapse of Lehman Brothers in 2008, the financial world was thrown into turmoil. Among the affected industries was the auto sector, which faced severe liquidity problems. In response, the U.S. government announced a bailout plan for GM, Chrysler, and Ford.

As part of the bailout, the government injected $49.5 billion into GM. In exchange, the government received a 60.8% stake in the company. This stake was held through the Troubled Asset Relief Program (TARP), which was established to provide aid to financial institutions and industries affected by the crisis.

The Road to Recovery and the Sale of GM Stock

GM began its recovery journey under the leadership of CEO Ed Whitacre. By 2010, the company had managed to restructure its operations and reduce its debt. This progress allowed the government to start selling its GM stock.

In 2010, the government began a series of sales, reducing its stake to 33%. The sales continued over the following years, with the government selling off its remaining shares by December 2013. At that point, the government had recovered approximately 25.7 billion from its original 49.5 billion investment.

The Current Status of GM Stock

Today, the U.S. government no longer owns any GM stock. The government's involvement in the auto industry has been a contentious issue, with some critics arguing that the bailout was a form of corporate welfare. However, others have credited the government's intervention with saving thousands of jobs and helping the auto industry recover.

It's important to note that the government's stake in GM was a temporary measure to prevent the company from collapsing. The government's decision to sell its stock was based on the company's recovery and the need to return the taxpayers' money.

Impact on GM and the Auto Industry

The government's involvement in GM had a significant impact on the company and the auto industry as a whole. By providing financial support, the government helped GM stabilize its operations and restructure its debt. This, in turn, allowed the company to invest in new technologies and products, positioning it for future growth.

The government's intervention also helped to restore consumer confidence in the auto industry. As GM and other automakers recovered, they were able to increase their market share and invest in new technologies, such as electric vehicles.

Conclusion

In summary, the U.S. government once owned a significant stake in GM as part of the 2008 auto industry bailout. By 2013, the government had sold its remaining shares, recovering approximately $25.7 billion. While the government's involvement in GM has been a controversial topic, it's clear that the bailout helped the company and the industry recover from the 2008 financial crisis.

Us Stock screener