GM Execs Want Their Jets Back, Want Taxpayers Take A Bath

GM Execs Want Their Jets Back, Want Taxpayers Take A Bath:

GM wants the Treasury to sell its GM shares at a huge loss, says the Wall Street Journal.  Nothing doing, says the Department of the Treasury. It does not appear to need the cash (it can have it printed if needed) and is holding out for a slightly smaller loss.
Reportedly, GM offered to repurchase 200 million of the roughly 500 million shares the U.S. holds. The remaining shares would have been sold through a public stock offering.
According to the report, GM’s attempt to talk DC into dumping its stock is driven by image reasons. U.S. taxpayers kept GM afloat with a $50 billion bailout in 2009 and now own 26.5% of the Detroit company, says the WSJ, and it continues:

“But GM executives have grown increasingly frustrated with that ownership, and the stigma of being known as “Government Motors.” Executives have said the U.S.’s shadow is a drag on its reputation and hurts the company’s ability to recruit talent because of pay restrictions. Privately, executives are also irked at the continued curbs on corporate jet use.”

The folks at the RenCen will have to fly commercial and wait for pay raises a little longer. According to the Journal’s information, Washington has written off breaking even at $53 a share, but “Treasury officials would consider selling at a price in the $30s.”
At around the time the plan was floated, the GM share traded at around  $20. Selling then would have incurred a loss of around $16 billion. Selling at above $30 would bring the loss into single digit billion territory.

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