General Motors pushing U.S. to sell stake: report

[Matt1970]

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.

http://www.marketwatch.com/story/general-motors-pushing-us-to-sell-stake-report-2012-09-17

Pay restrictions aren't supposed to keep away people from a job. Say it aint' so!!??!!

 

[piasabird]

Let GM make some money then??? Reorganize the Unions. Maybe just let the whole thing go bankrupt??? Better sometimes to take a loss than to lose every dime the feds have invested in GM. The Government should not hold onto stock that keeps going down. What happens when it hits Zero or GM files bankruptcy?

Let the banks buy the investment amount and let them claim a loss on the deal as a way of paying back the feds for bailing them out.

Tell GM they can borrow the full investment amount and eat the stock loss themselves.

 

[piasabird]

GM wants to stiff the government. However, the Government may never see that money paid back if they hold onto the stock. This is what happens if you get in bed with the government. If you take government funds, they get to tell you what to do. This is exactly how government run health care will work.

 

[Nintendesert]

GM should have taken bankruptcy. Instead they chose the free easy money and look at where they are now. They made their bed and now they need to lay in it with their government investors.

 

[OCGuy]

You think Obama is going to take a multi-billion dollar loss on GM right before an election?

This is government at its finest. But GM knew what they were doing.

 

[DietDrThunder]

GM looked at taking the traditional bankruptcy route, but unfortunately you have to have creditors that have money in order to do so. At that time the banks were being bailed out as well and there wasn't money available.

 

[Incorruptible]

GM shouldn't have been bailed out, this is just another reason to stop big government which allows this to happen

 

[mshan]

Looking into the abyss is what allowed Obama to restructure GM with the willing consent of management and labor.

And it is why GM can now break even even when production is around Depression levels (total domestic auto sales of 10.5 million units with 18 - 19% domestic market share). The Morningstar analysis from which that fact came also said that GM will be printing money when the global economy rebounds and production ramps up:

"Sales started the year strong, backed off a little in May, but came back during the summer.

Schuster expects to end the year at 14.3 million, more than 1.5 million above last year.

Sales hit a recent high of 17 million in 2005.

The bottomed at a 30-year low of 10.4 million during the recession in 2009."

http://www.csmonitor.com/Business/L...0904/Behind-rise-in-August-auto-sales-pickups

Morninstar's estimate of intrinsic value for GM ($48 on 7/9/12; GM stock closed today at $23.80) means GM wants the government to lock in paper losses, when they also probably know quite well that their stock is very undervalued right now. Morningstar's fair value estimate of Ford was $20 on 8/20/12. It closed today at $10.39.

Same headwinds Ford is facing, significant global slowdown and serious recession in Europe.

GM's North American unit has restructured and is now very healthy, but they can't restructure their European operations (which are bleeding money) until end of 2014 (start at 2:50 mark: http://video.cnbc.com/gallery/?video=3000116510&play=1) because of labor laws and union contract there. I suspect the same is just as true for Ford.

 

[bfdd]

GM should have died a few years ago. Our obsession with life support in the USA is disgusting. Die with dignity.

 

[Vic Vega]

http://www.marketwatch.com/story/general-motors-pushing-us-to-sell-stake-report-2012-09-17

Pay restrictions aren't supposed to keep away people from a job. Say it aint' so!!??!!

They kept me away, no foolin'.

 

[Agent11]

Good for the treasury. They should hold onto those shares and sell them only when the price rebounds.

 

[piasabird]

What if the price does not rebound?

 

[piasabird]

The government cold just short sale the stock.

 

[Hayabusa Rider]

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.

Translated from corpspeak-
"We can't get paid whatever we want! It's not fair!" If anything the theory that an open ended pay scheme for upper management isn't necessary. I think they're jealous that they can't get the deal the financial sector did when they screwed us.

I'm not very sympathetic. GM management ran itself into the ground by making cars that people didn't really need or want, QC was low, and the idea of connecting their ideas to what's going on in the factory was insulting. Sorry, but the plush royal life is over.

 

[piasabird]

The government could buy another 25% and kick those people off the board and sell the company off a piece at a time.

 

[OCGuy]

The government could buy another 25% and kick those people off the board and sell the company off a piece at a time.

Chavez supports this message.

 

[feralkid]

GM should have died a few years ago. Our obsession with life support in the USA is disgusting. Die with dignity.

Having China buy up our auto industry (which also builds our tanks) lacks dignity, would you not agree?

 

[Vic Vega]

Having China buy up our auto industry (which also builds our tanks) lacks dignity, would you not agree?

Which tanks?

 

[bfdd]

Having China buy up our auto industry (which also builds our tanks) lacks dignity, would you not agree?

Yeah, I'm not seeing the issue here. Then the death can be their problem, not ours.

 

[ultimatebob]

Having China buy up our auto industry (which also builds our tanks) lacks dignity, would you not agree?

Oh yeah... I love the idea of China building the next generation of computer controlled and networked military equipment for the US and their allies.

They wouldn't have to fire a single shot when it comes time to invade Taiwan... all they need to do is activate the secretly embedded remote kill switch that they hid in the firmware

 

[bfdd]

Oh yeah... I love the idea of China building the next generation of computer controlled and networked military equipment for the US and their allies.

They wouldn't have to fire a single shot when it comes time to invade Taiwan... all they need to do is activate the secretly embedded remote kill switch that they hid in the firmware

Just don't have China make those things? Or if you're so worried, start your own fucking company and compete. Waaah waah crying about China waaah.

 

[Agent11]

What if the price does not rebound?

The price always rebounds. We are in a recession. It will not last forever.

 

[IGBT]

or they could do what the liberals do and ask the Gov.to buy ALL the stock. then they could spend and loose money endlessly like the obama and it won't matter.