The Treasury Department sold off its remaining stake in General Motors on Monday, losing $10.5 billion on its investment that kept the automaker afloat through the financial crisis.
Treasury Secretary Jack Lew told reporters that the government recouped $39 billion of the $49.5 billion it sank into the Detroit-based company in 2008 and 2009, essentially saving about 1 million jobs.
{mosads}”This action marks one of the final chapters in the Administration’s efforts to protect the broader economy by providing support to the automobile industry,” Lew said.
As a result of President Obama’s efforts, Lew said the auto industry has added more than 370,000 new jobs since the summer of 2009, when the automaker went into bankruptcy protection.
“All three U.S. automakers are now profitable, competitive and growing,” he said.
All told, Treasury has now recovered more TARP funds than was disbursed — $432.7 billion on all Troubled Asset Relief Program (TARP) investments compared with $421.8 billion disbursed — including the sale of Treasury’s shares in AIG.
“The president understood that inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production,” Lew said.
Treasury said earlier this month that it was speeding up its GM exit and would sell the final 31 million shares of the remaining 912 million by year’s end.
“For our autoworkers and the communities that depend on them, the road we’ve taken these past five years has been a long and difficult one,” Obama said in a statement Monday.
“But it’s one we’ve traveled together. And as long as there’s more work to do to restore opportunity and broad-based growth for all Americans, that’s what we’ll keep doing to reach the brighter days ahead.”
Treasury officials argued that despite the gap, the economy and automaker are much better off for the investment.
A separate report released Monday, said the bailout saved 1.2 million jobs, kept the auto industry from collapsing and has, in turn, boosted the now thriving sector, according to the Center for Automotive Research (CAR).
GM executives predicted that sales would pick up with the government’s exit because it could shed its unappealing nickname “Government Motors.”
“Continued investments, innovation, and job creation are just some of the “returns” of a healthy GM and domestic auto industry,” said GM Chairman and CEO Dan Akerson.
“Our work continues uninterrupted, and we will keep our sights squarely on our customers and transforming the way we do business.”
On the news, GM shares hit a record high of $40.90 a share.
Since entering bankruptcy protection more than four years ago, GM has posted 15 straight quarters of profits and has added jobs and billions in facilities.
Senior Treasury officials said it was never the intention of the federal government to require GM to repay its entire bailout.
The government has one final auto industry investment to sell from its initial $85 billion bailout — its $17.2 billion bailout of stake in Ally Financial, which was known as GMAC. Treasury plans to complete that exit next year.