US Treasury to sell stake in General Motors

Total loss to be around $6.5bn.

The United States government is starting to sell off its stake in General Motors, taken as part of the bailout which saved the company in 2009. It plans to take 15 months to completely disinvest, but in the meantime, that investment is doing so well that the total value of the bailout may be far smaller than was previously thought.

When the government intervened in July 2009, it spent $49.5bn to purchase most of the assets and trademarks of "old GM", through an intermediary called NGMCO Inc, ensuring the continued operation of most of the company's plants and continued employment of most of its workers.

Since then, the Treasury has already earned back $28.7bn of its money from "repayments, sales of stock, dividends, interest, and other income". And with its first move towards disinvestment, it plans to sell 200m of its 500.1m shares in GM back to the company itself, for $27.50 a share, raising a further $5.5bn. So at the end of that sale, the government will be left with $14.8bn still in GM and a further 300.1m shares.

It's obviously unlikely that the state will make back its entire stake; Felix Salmon estimates that the price would need to rise to $50 a share, considerably higher than the all-time peak of $39.48 early last year. But it is possible; and it's definitely the case that the state will lose a lot less than the $50bn figure which was causing such consternation when the bailout was announced.

Such is always the case with investment programmes like this one, though. The headline figure gets reported, and debated over, as though it were just the same as any other spending; the fact that that money comes back to the Treasury, either in actual cash, as with this sort of investment, or in kind, as with most infrastructure investments, is buried in the discussion.

If the government manages to sell the its remaining shares at today's face value, it will end up losing around $6.5bn from its four-year investment in GM. If the share price rises, that number will fall lower still. At the time, there was obvious uncertainty about how successful the bailout would be; and there was always a chance that the government would lose its whole stake.

But there was also a chance that, as with its similar stake in insurance company AIG, it would make a profit. And absent either of those, a $6.5bn programme which saved a company employing 202,000 people isn't that bad. But as Matt Yglesias points out, the problem may be that those jobs are, in the long run, not saveable at all:

The total collapse of the Michigan-centered auto industry would, for better or for worse, have opened up new market opportunities for other automaker with production facilities located elsewhere… On the other hand, either the total collapse of the midwestern auto industry or a huge wave of bank failures would have produced massive dislocations in people's lives and a lot of misery on the road to renewal. Those are the questions to think about, not how much money was made or lost in this or that investment.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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In praise of the late developer

The success of late developers proves that our obsession with early achievement is wrong.

A fortnight ago, I fell into conversation with the head teacher of a local school. “You’ve got to create room for late developers,” he said. “The obsession with early attainment doesn’t suit most children.”

We were soon finishing each other’s sentences – talking about long-term confidence rather than short-term hothousing, how children don’t develop in a linear way, and the value of having transferable skills rather than a single focus from a young age.

What a shame, I reflected, that his message doesn’t reach a wider audience. We hear so much about prodigies and precociousness – Serena Williams and her pushy father, Tiger Woods and “tiger mothers” – and so little of the counter-argument: the high achievers who emerge at a slower pace in more balanced circumstances.

Our conversation ended when we both departed to watch England play Scotland in the Six Nations tournament. Only then did I learn that the head teacher’s son Huw Jones was playing in the centre for Scotland. He scored two tries, just as he did last autumn in his home debut against Australia.

Jones’s career is a tacit endorsement of his father’s philosophy. In his penultimate year at school, Huw was still playing mostly in the second XV. Five years on, he is a burgeoning talent on the world stage. The two facts are connected. Jones didn’t just overtake others; he also retained the naturalness that is often lost “in the system”.

As boys, he and his brother made up their own version of rugby practice: could the ­attacker sidestep and run past the defender without setting foot outside the five-metre line? They were just having fun, uncoached and unsupervised. But their one-on-one game was teaching the most valuable skill in rugby: the ability to beat defenders in confined spaces.

Jones had access to superb opportunities throughout – at home, at Canterbury rugby club and then at Millfield, the independent school in Somerset well known for producing sportsmen. But at Millfield, he was far from being a superstar. He seldom played “A-team” rugby. The message from home: just keep enjoying it and getting better and eventually your time will come.

There was a useful precedent. Matt Perry, who won 36 caps for England between 1997 and 2001, had been a “B-team” player at school. What matters is where you end up, not who leads the race at the age of 16. Jones also developed transferable skills by continuing to play other sports. “Don’t specialise too early,” was the mantra of Richard Ellison, the former England cricketer who taught at Millfield for many years.

When Jones was 18 and finally blossoming in the school’s first XV, rugby agents started to take an interest, promising to place him in the “academy” of a professional team. “But I’d seen so many kids take that route and seen how bored they got,” his father, Bill, reflects. So Bill advised his son to go abroad, to gain experience of new cultures and to keep playing rugby for fun instead of getting on the tracksuited professional treadmill.

So Jones took a teaching job in Cape Town, where he played men’s club rugby. Instead of entering the professional system, as one of a bland cohort of similar-aged “prospects”, he served his apprenticeship among players drawn from different backgrounds and ages. Sport was shown to be a matter of friendship and community, not just a career path.

The University of Cape Town spotted and recruited Jones, who helped it win the South African university competition. Only then, in 2014, did British professional rugby teams start to take a serious interest. Jones, however, was enjoying South Africa and stayed put, signing a contract with the Stormers in the Super Rugby tournament – the world’s leading club competition.

So, in the space of 18 months, Jones had gone from being a gap-year Brit with no formal ties to professional rugby to playing against the world’s best players each week. He had arrived on the big stage, following a trajectory that suited him.

The level of competition had escalated rapidly but the tries kept coming. Scotland, by now closely monitoring a player qualified by birth, gave him his spectacular home debut against Australia last autumn – remarkable but not surprising. Finding his feet ­instantly on each new stage is the pattern of his career.

Those two qualities – first, instinctive ­try-scoring; second, a lack of vertigo – are connected. Amid all the jargon of professional sport, perhaps the most important qualities – freshness, ingenuity and the gift of surprise – are undervalued. Yet all of these rely on skills honed over many years – honed, but not dulled.

Shoehorning all young players into rigid, quasi-professional systems long before they are ready comes with risks. First, we seldom hear from the child prodigies who faded away (often damaged psychologically). Many players who are pushed too hard miss their natural learning arc; the narrative of their ambition, or the ambition imposed on them by parents, is often out of step with their physical and psychological growth. Second, systems have a habit of overestimating their contribution: they become blind to outsiders.

In a quiet way, Jones is a case study in evolved education and not just sport: a talented performer who was given time and space to find his voice. The more we learn about talent, as David Epstein demonstrated in The Sports Gene, the clearer it becomes that focusing on champion 11-year-olds decreases the odds of producing champion adults. Modern science has reinforced less frantic and neurotic educational values; variety and fun have their virtues.

Over the long term, put your faith not in battery farming but instead, in Bill Jones’s phrase, in “free-range children”.

Ed Smith is a journalist and author, most recently of Luck. He is a former professional cricketer and played for both Middlesex and England.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution