Taxpayers Still Owed Billions from GM Bailout

FBN's Liz MacDonald on GM's payback to taxpayers from the government bailout.

Report: Treasury Shoots Down Plan to Unload Stake in GM at a Loss

By Features FOXBusiness

The Treasury Department isn’t buying a plan by General Motors (GM) for the government to unload its large stake in the auto maker at a hefty loss, according to a published report.

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The report highlights the sometimes competing interests between the U.S. and GM, which has tired of government oversight and bailout stigma that has caused some to refer to the auto maker as “Government Motors.”

According to The Wall Street Journal, GM execs suggested earlier this summer that the company would buy back 200 million of the 500 million shares the U.S. owns and the Treasury would unload its remaining stake through a public stock offering.

However, that plan would generate a loss of about $15 billion for the government on the GM bailout based on Friday’s close at $24.14, the paper said, adding that the company’s stock would have to surge to $53 for the U.S. to break even.

Treasury officials would consider selling the stake if GM’s stock rose to the $30s, the Journal reported.

The talks come more than three years after the U.S. rescued GM with a $50 billion bailout during the aftermath of the worst financial crisis since the Great Depression.

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The GM rescue has become a political football as President Obama has pointed to it as a move that saved many jobs, while Republican challenger Mitt Romney has criticized it.

Shares of Detroit-based GM retreated 1.24% to $23.84 Monday, lowering their 2012 gain to 17.6%. Rival Ford (F) has seen its stock slide about 4% this year.