The GM bailout is about to be history
NOW that the campaign is over, President Obama can relax and finally dump the GM stock held by taxpayers, beginning the end of the $50 billion bailout of that company.
Taxpayers stand to lose $12.6 billion on the deal.
In 2009, the government gave GM $50 billion, with Canada kicking in another $10 billion. As part of its repayment, GM gave both governments stock worth $33 a share at the time.
The stock would have to rise in price to $53 a share for the government to break even.
The stock was never worth even $33 a share, and GM will now buy 200 million shares from taxpayers for $27.50 each.
In effect, the government bought high - $33 a share - and will now sell low at $27.50.
The government will sell off the taxpayers' remaining 300 million shares over the next year and a half. The price now would have to reach $70 a share for taxpayers to break even.
More likely, taxpayers are out $12.6 billion.
The president's argument that well, he saved Detroit and the American automobile industry, certainly would have been true in 1960 when GM sold half of the cars and trucks purchased in America.
But GM's market share is 17 percent today and "foreign" auto plants hum across the nation.
The list of auto companies with plants in the United States includes BMW, Honda, Hyundai, Kia, Mercedes-Benz, Nissan and of course, Toyota.
Buying American today doesn't mean what it meant 50 years ago.
GM's peril was overstated. The president seemed to imply that the company would have gone out of business entirely, which was never the case.
And there were losers in the bailout, said Republican Speaker of the House John Boehner of Ohio.
The president's action hurt "both the bondholders and the employees at the dealerships that were arbitrarily closed by the White House," Boehner said last month.
What is saving GM and the rest of the automotive industry is a slowly recovering economy. Automobile companies are expected to sell 15.5 million cars and trucks to Americans this year, the most since 2008.
Let us all agree that the government should never again force taxpayers to bail out a private company like this.