|By TOM KRISHER, AP Auto Writer|
Taxpayers will lose money on the deal, but it gets the government out of the car business. GM has done well over the past three years, piling up
As part of a deal announced Wednesday, GM will spend
The government bailed out GM with
That's more than double the current trading price. GM will buy the 200 million shares at
At a more realistic price of
GM says having the government as an owner kept customers away from dealerships. Chief Financial Officer
As part of the stock buyback deal, GM almost immediately will be allowed to own a corporate jet or be required to manufacture a certain percentage of cars and trucks in the U.S. GM says it already has exceeded the manufacturing requirements and will continue to do so for the foreseeable future. It has no immediate plans to buy or lease corporate jets, but it has chartered jets for executive travel at times.
However, government-ordered pay restrictions will remain in effect until the Treasury completes the sale of its remaining 19 percent stake. CEO
The bailouts of GM and rival Chrysler were part of the Trouble Asset Relief Program created by
The GM bailout played a role in this year's presidential election, helping President
Treasury said Wednesday that the investment in GM was worth it.
"The auto industry rescue helped save more than a million jobs during a severe economic crisis," said
Massad said that exiting the GM investment "is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests."
Initially the government got 912 million shares in exchange for the money it loaned to GM. It sold 412 million shares for
GM shares rose shortly after the IPO, but then slid as the U.S. economic recovery slowed and
Although GM is paying a premium for the government shares, Ammann GM's other shareholders benefit because the number of shares on the market will be reduced about 11 percent. That should increase the value of the remaining shares.
The move was approved by the GM board on Tuesday evening after the company got opinions from its management and financial advisers, GM said.
GM will fund the deal out of its cash balance, which at the end of September was close to
AP Business Writer
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