Skip to content
Catholic Online Logo

By Catholic Online (NEWS CONSORTIUM)

12/20/2012 (1 year ago)

Catholic Online (www.catholic.org)

Many disgruntled people have dubbed the company 'Government Motors'

General Motors, that venerable symbol of American automotive excellence, will be saved from certain insolvency thanks to the U.S. government - but it will cost taxpayers dearly. According to the plan, General Motors will repurchase 200 million shares of its own stock currently held by the U.S. Treasury. The White House has announced plans to sell off its remaining 300 million shares within the next 12 to 15 months.

During a holiday event with reporters last week, CEO Akerson indicated his desire to have the government sell off its stake. He didn't give an indication that any move was imminent. Most analysts had not expected an announcement until sometime in early 2013.

During a holiday event with reporters last week, CEO Akerson indicated his desire to have the government sell off its stake. He didn't give an indication that any move was imminent. Most analysts had not expected an announcement until sometime in early 2013.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

12/20/2012 (1 year ago)

Published in Business & Economics

Keywords: General Motors, Government Motors, bailoout, taxpayers, U.S. economy


LOS ANGELES, CA (Catholic Online) - The car maker will pay $27.50 for the shares it will acquire, a 7.9 percent premium over the $25.49 closing price on December 18, 2012. This is a markedly sharp discount from the $33 price set during GM's initial public offering in November 2010. In either case, taxpayers will lose billions on the sale.

"This announcement is an important step in bringing closure to the successful auto industry rescue, it further removes the perception of government ownership of GM among customers, and it demonstrates confidence in GM's progress and our future," chairman and CEO of GM Dan Akerson says.

GM also noted that it will take a $400 million charge against earnings during the fourth quarter in connection with the stock repurchase.

During a holiday event with reporters last week, CEO Akerson indicated his desire to have the government sell off its stake. He didn't give an indication that any move was imminent. Most analysts had not expected an announcement until sometime in early 2013.

An issue that failed GOP presidential candidate Mitt Romney repeated frequently during his campaign was that the U.S. treasury has been under strong pressure to announce an exit plan. Romney called on the White House to sell off its stake last summer, though at that point GM was trading as low as $18.72 a share.

At that price, the government would have received about $1.5 billion less than it will now get a total of $5.5 billion for the initial 200 million share sell-off.

Industry analysts had estimated a sale price of $53 would be needed to recoup the government's full investment in General Motors, however.

Both parties have sought a way to sell off the government's remaining stake in "an orderly fashion." There was clear concern that simply dumping 500 million shares onto the market all at once would cause major disruption and sharply depress GM's stock price.

Insiders suggest that the most likely outcome would be the remaining 300 million shares will be sold off in chunks, rather than en masse, to minimize any market disruption.

As the U.S. economy continues to improve, with auto sales expected to continue rebounding after a strong close to 2012, there are hopes that GM's share price will continue its upward momentum.

The bailout has proved extremely controversial, far more than the much larger rescue of U.S. banks. GM officials have acknowledged that their research shows some potential buyers won't purchase products from what has been derisively called "Government Motors." It's unclear if the planned sell-off of stock will overcome that aversion.

---


Pope Francis: end world hunger through 'Prayer and Action'


© 2014 - Distributed by THE NEWS CONSORTIUM

Pope Francis Prayer Intentions for September 2014
Mentally disabled:
That the mentally disabled may receive the love and help they need for a dignified life.
Service to the poor: That Christians, inspired by the Word of God, may serve the poor and suffering.



Comments


More Business & Economics

Walmart to enter banking world with low-cost checking accounts Watch

Image of Walmart has been eying financial services for some time now.

By Catholic Online (NEWS CONSORTIUM)

Walmart is making its biggest venture into the banking world after several failed attempts in the past. The nation's largest retailer is joining Green Dot, already known for its prepaid payment cards, to supply checking accounts to nearly everyone over 18 years ... continue reading


The Chinese are coming! E-commerce giant Alibaba cleans house with its initial public offering Watch

Image of Chinese e-commerce giant Alibaba has raised more than $21 billion with its IPO, with stocks priced at $68 per share, signaling a strong demand for the tech-giant.

By Catholic Online (NEWS CONSORTIUM)

The Chinese e-commerce giant Alibaba has made the largest U.S.-listed initial public offering (IPO) of all time, with stocks priced at $68 per share, signaling a strong demand. LOS ANGELES, CA (Catholic Online) - Only large investors, like hedge funds, can ... continue reading


Bottom of the Barrel - Thanks to business tax, the U.S. is Number 32 in the world Watch

Image of A competitive tax code is one that limits the taxation of businesses and investment. Since capital is mobile and businesses can choose where to invest, tax rates that are too high

By Catholic Online (NEWS CONSORTIUM)

A new international ranking shows that the U.S. tax burden on business is close to the worst in the industrialized world. So says the Wall Street Journal, the nation's leading journal on business. The White House and Sen. Charles Schumer (D., N.Y.) will attempt ... continue reading


Unemployment rate for black Americans at 11.4 percent, more than double the rate for whites Watch

Image of There remains a wide disparity in employment in the United States, in spite of efforts to close this broadening gap.

By Catholic Online - (NEWS CONSORTIUM)

There remains a wide disparity in employment in the United States, in spite of efforts to close this broadening gap. Figures show that while unemployment nationwide is 6.1 percent, the unemployment rate for black Americans at 11.4 percent. LOS ANGELES, CA ... continue reading


A record 92,269,000 Americans jobless for month of August Watch

Image of So - there you have it: Things are STILL tough all over.

By Catholic Online - (NEWS CONSORTIUM)

It never went away, come rain or come shine form the past hot summer months . Many Americans remain idle and without work. According to the Bureau of Labor Statistics, a record 92,269,000 Americans 16 years of age and older didn't participate in the labor force ... continue reading


We owe HOW MUCH? New report reveals U.S. government owes $6 trillion to foreign entities Watch

Image of Foreign interests, including nations and businesses, own more than $6 trillion of U.S. government debt.

By Catholic Online (NEWS CONSORTIUM)

Foreign interests now own more than $6 trillion in U.S. government debt, a recent Treasury Department report on major foreign debt holders revealed. LOS ANGELES, CA (Catholic Online) - As of the end of June 2014, foreign-held debt totaled $6,013,200,000,000 in U.S. ... continue reading


Are you ready? Economic analysts predict bear market by end of 2014 Watch

Image of Economic analysts are predicting a significant drop in the market, which may be as high as 60%.

By Catholic Online (NEWS CONSORTIUM)

Two financial experts announced on August 27 that markets may face a fall of up to 60% by the end of 2014. LOS ANGELES, CA (Catholic Online) - David Tice, the president of Tice Capital and founder of the Prudent Bear Fund, reported that a jolt to international ... continue reading


Oh really Obama? President claims economic success while population dependent on food stamps hit all time high Watch

Image of The number of Americans on food stamps has not decreased since 2011, despite claims from President Obama that the U.S. economy has recovered under his policies.

By Catholic Online (NEWS CONSORTIUM)

Democrats are facing a tough midterm election, and with less than three months to go the party is scrambling to prop up the image of the U.S. economy in the minds of disgruntled voters. LOS ANGELES, CA (Catholic Online) - Yet one of the quickest shorthand ... continue reading


Here comes a boom! $7 trillion in untapped funds to flood global market Watch

Image of A report suggests that corporations and equity firms hold nearly $7 trillion in cash reserves that could bolster the world's economy.

By Catholic Online (NEWS CONSORTIUM)

A new boost to the global economic recovery may happen soon, as corporate giants and private equity firms prepare to tap into cash reserves of $7 trillion, stored since the current financial crisis began back in 2008. LOS ANGELES, CA (Catholic Online) - Investors ... continue reading


OBAMA PARTIES AS ROME BURNS: U.S. wages down by 23 percent - while president takes a vacation Watch

Image of The timing of Obama's swank vacation has even the president's supporters worried.

By Catholic Online (NEWS CONSORTIUM)

Lots of negative news to go around - Ebola seems to be spreading worldwide, Islamic State is increasing its stranglehold on Iraq, a much beloved comedian and screen actor is found dead at home, an apparent suicide - U.S. President Barack Obama is in Martha's ... continue reading


All Business & Economics News

Newsletters

Newsletter Sign Up icon

Stay up to date with the latest news, information, and special offers

Daily Readings

Reading 1, Job 3:1-3, 11-17, 20-23
1 In the end it was Job who broke the silence and ... Read More

Psalm, Psalms 88:2-3, 4-5, 6, 7-8
2 may my prayer reach your presence, hear my cry for ... Read More

Gospel, Luke 9:51-56
51 Now it happened that as the time drew near for him ... Read More

Saint of the Day

Saint of the Day for September 30th, 2014 Image

St. Jerome
September 30: St. Jerome, who was born Eusebius Hieronymous Sophronius, was ... Read More

Inform, Inspire & Ignite Logo

Find Catholic Online on Facebook and get updates right in your live feed.

Become a fan of Catholic Online on Facebook


Follow Catholic Online on Twitter and get News and Product updates.

Follow us on Twitter