U.S. Sells Remaining GM Stock

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Remember TV commercials in early 2010 where GM's then-CEO Ed Whitacre proclaimed the automaker had paid back its loans in full? Though technically accurate — the automaker repaid $8.1 billion in loans from the U.S. and Canadian government in April 2010 — the ads suggested taxpayers had no more involvement in Detroit's largest automaker. Critics argued that wasn't the case. When the Bush and Obama administrations orchestrated a $49.5 billion bailout of the ailing automaker in 2008 and 2009, part of the deal involved the U.S. Treasury taking a 61 percent ownership stake in The General. Taxpayers have held a stake until now.

The Treasury announced Monday that it sold its remaining shares in GM, whose U.S. brands include Buick, Cadillac, Chevrolet and GMC. But the automaker may want to hold off an ad blitz this time around. That's because the final chunk of a progressive sell-down means we can finally total the losses, and the bill for taxpayers is $10.5 billion.

By Kelsey Mays | December 10, 2013 | Comments (3)

U.S. Government To Sell All GM Stock

Within the next 12-15 months, you won’t have "Government Motors" to kick around anymore — the federal government and GM have announced a plan for the U.S. to begin selling its remaining stake in the automaker, starting today with a sale of 200 million shares back to GM.

The company will buy 40% of the remaining shares held by the government for $27.50, or about $2 above the current market price for GM stock, costing it a total of $5.5 billion. The Treasury Department will then begin an orderly public sale of the remaining 300 million shares beginning in January 2013, with the goal of totally exiting its ownership of GM by March 2014. The stock sale today will leave the Treasury with a roughly 19% overall stake in the company.

By Aaron Bragman | December 19, 2012 | Comments (5)

What Are Pontiac Owners Buying Today?

PontiacHas it been nearly two years since General Motors filed for bankruptcy protection? Yes indeed. The automaker filed Chapter 11 in June 2009, and with that, the fates of Hummer, Saturn and Pontiac were sealed.

The most important of those shuttered brands was arguably Pontiac because of its size. In 2008, Pontiac was the 12th most popular brand in America, slotting between Kia and Mazda. So where is the Pontiac diaspora migrating? They’re mainly going to other GM brands, according to a recent study by RL Polk & Co.

In 2010, of the 57,641 former Pontiac owners looking for a new ride, nearly 53.3% of them purchased another remaining GM brand. Historically, nearly 60% of Pontiac owners have remained loyal to GM, so the figure is slightly down.

By Colin Bird | March 11, 2011 | Comments (12)

GM is Profitable a Year After Bankruptcy

General Motors reported its first full year of profitability today, making 2010 the first time the automaker has posted profits since 2004. The company's Chief Financial Officer Chris Liddell said it was GM's best year in a decade.

It's hard to fathom that the company went through a structured bankruptcy in June 2009 with the help of the federal government. In less than two years and the first full fiscal year since that reorganization, the company is not only profitable but thriving as car sales nationally increase with a slowly rebounding economy.

The company made $4.7 billion in 2010, which is a dramatic turnaround from the $4.4 billion it lost in 2009. GM's 45,000 hourly employees were given bonuses of $4,300, with another 3,000 workers earning $3,200 in bonuses.

The government still owns 26% of the company in stock. However, GM's stock traded below $33 today. The initial price of the stock when it was issued late last year was $33. The government likely won't sell off the remaining shares until they're worth more to offset the funds that helped GM through bankruptcy.

GM posts first full-year profit since '04; stock dips below IPO (Detroit News)

By David Thomas | February 24, 2011 | Comments (3)

Report: Ford Took Federal Funds, Too

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While Ford was making noise about not taking federal bailout money, they and other major automakers (both foreign and domestic) got federal aid to the tune of tens of billions of dollars when the economy tanked in 2008.

Yesterday, the federal government released the names of companies and the amounts of loans handed out during the financial crisis of 2008 to keep loans flowing as credit dried up everywhere. A number of those companies were the lending arms of automakers.

Automotive blog Jalopnik broke down which automotive lending companies got the most help, and leading the way was Ford Credit, which borrowed $15.9 billion. GMAC, GM’s financing arm which provided auto loans beyond the GM family of vehicles, took $13.9 billion. BMW took $6.2 billion. Chrysler $4.9 billion and Toyota $4.6 billion.

The GM and Chrysler loans were completely separate from those two companies’ government-financed bankruptcies.

While the news and numbers aren’t earth shattering — funds to the automotive lending companies totaled just $57.9 billion out of $3.3 trillion in TARP funds — it could color Ford’s perception as the only Detroit-based company that didn’t need a federal handout during the economic crash.

That’s a perception the company has fueled itself, by making statements about how not taking a “bailout” has been beneficial to its recent resurgence. We realize the two transactions are quite different, and this loan was not a bailout.

But we wonder how the public will see it.

All of this aid has since been repaid with interest to the government.

Graph courtesy of Jalopnik

By David Thomas | December 2, 2010 | Comments (12)

GM Thanks Public for Bailout in Holiday Ad

Just 16 months after emerging from bankruptcy, General Motors is again a publicly traded company and expects its first full year of profit since 2004. With the company in such good shape, the automaker will thank the public for their financial support in a 60-second ad that will air on Thanksgiving Day.

The ad illustrates failure through several pop culture references and cartoon images. There’s no voiceover, but toward the end of the ad, the words, “Thank you for helping us get back up" appear, followed by the GM logo.

The U.S. government invested $49.5 billion of taxpayer money into General Motors from 2008-2009, giving it 61% ownership of the automaker.

According to the Associated Press, the U.S. Treasury Department earned $11.7 billion from the sale of GM stock in the company’s IPO last Thursday.

Overall, U.S. government ownership in the automakers is now down to 33 percent from around 61 percent before the IPO, according to GM.

By Colin Bird | November 24, 2010 | Comments (37)

GM IPO Set; You Buying?

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General Motors  announced today that it is filing a public offering of stock Nov. 18 and that the price of the common stock will be between $26 and $29 a share. The sale comes nearly two years since President George W. Bush first approved a bailout of the auto industry and 18 months after President Barack Obama sponsored a government-backed bankruptcy and ownership stake in GM and Chrysler.
 
The sale of nearly 365 million shares will raise as much as $10.6 billion for the company. The U.S. Treasury plans to sell a portion of its shares after the IPO, but it is unclear how much. Many analysts suggest the government will still lose money on the deal. One number mentioned today was a $131 share price for the government to break even.

No matter the balance sheet, the IPO will mark the beginning of the end of government ownership of GM, and it will put the company back on the free market. So the question remains: Would you buy GM stock?

By David Thomas | November 3, 2010 | Comments (16)

GM Files IPO, Announces Future Product Plans

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Today, General Motors filed its plans with the Securities and Exchange Commission to go public. The initial public offering of stock will be approved by the government agency with a future date set. Prices and the amount of shares will also be decided at a later date, as well as how much of the company’s stake will be sold off by the federal government.
 
What the filing includes for car buyers and enthusiasts is a brief glimpse at the company’s ambitious plans for new products over the next three to four years. The documents filed with the SEC state that GM will release 19 new vehicles in North America between 2010 and 2012 among its four brands: Buick, Chevy, GMC and Cadillac. This number likely includes new 2011 models already arriving at dealers, such as the Cadillac CTS coupe and the high-powered CTS-V coupe and, of course, the upcoming Chevy Volt.
 
The document goes on to say that between 2013 and 2014, an additional 27 new vehicles will be launched. That number seems high, but it could reference multiple versions of one vehicle — like a new Chevy Malibu and a hybrid version, for example — as two different models. The company confirms the near-term launches of a new Chevy Aveo, Chevy Spark, redesigned Malibu and new Buick compact and mid-size vehicles.
 
On the hybrid front, GM confirmed that it would launch a plug-in hybrid vehicle using its current two-mode hybrid system in vehicles like the Chevy Tahoe Hybrid. It will travel at low speeds on all-electric power and then operate on the hybrid powertrain at high speeds like the Toyota Prius. What brand that model would be sold under was not announced.
By David Thomas | August 18, 2010 | Comments (2)

GM Readies Stock Offering

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The Detroit News reports that General Motors is planning to launch a public stock offering as early as next week. If that news is correct, the offering would happen months sooner than most analysts and officials had predicted.
 
Most of them believed that an initial public stock offering would wait until the value of the company and its stock would recoup nearly all the $50 billion the government loaned GM for a 60.8% stake in the company. However, the Detroit News says that estimates for an IPO next week would fall nearly $10 billion short of that figure.
 
While an IPO is a sure sign that GM has become a healthy company once again, it’s uncertain how taxpayers will react if the loans aren’t repaid in full.
 
GM Gets Ready for Public Stock Offering (The Detroit News)
By David Thomas | June 23, 2010 | Comments (3)

A Year Later, GM Bankruptcy Resonates With Car Shoppers

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Today is the one-year anniversary of General Motors filing for its federally backed bankruptcy and restructuring. To see how consumer behavior has been affected, Cars.com conducted a survey of more than 1,000 people and found that a year later, 32% were less likely to consider GM brands than others.

That’s not a cheery number, but 63% said the bankruptcy would have no impact on their shopping behavior, and that is a large chunk of buyers. Five percent said they’d be more likely to buy a GM vehicle after the bankruptcy.
 
The same question was asked regarding Chrysler as well, and an identical 63% response was recorded in the “no impact” category, with 33% saying they were less likely to consider the Chrysler range of vehicles.

When asked if the fact that Ford took no federal money would influence their car shopping, 47% said it made them more likely to consider a Ford when buying their next car, while 53% said it made no impact on their decision. Compare that 47% more favorable number with GM’s 5% however, and it’s easy to see the bankruptcy sting still lingers as the domestic brands battle for market share in a rebounding economy.

The survey was conducted in May and included a random sample of 1,057 men and women.

By David Thomas | June 1, 2010 | Comments (17)

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