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.

Photo: Getty
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Like it or hate it, it doesn't matter: Brexit is happening, and we've got to make a success of it

It's time to stop complaining and start campaigning, says Stella Creasy.

A shortage of Marmite, arguments over exporting jam and angry Belgians. And that’s just this month.  As the Canadian trade deal stalls, and the government decides which cottage industry its will pick next as saviour for the nation, the British people are still no clearer getting an answer to what Brexit actually means. And they are also no clearer as to how they can have a say in how that question is answered.

To date there have been three stages to Brexit. The first was ideological: an ever-rising euroscepticism, rooted in a feeling that the costs the compromises working with others require were not comparable to the benefits. It oozed out, almost unnoticed, from its dormant home deep in the Labour left and the Tory right, stoked by Ukip to devastating effect.

The second stage was the campaign of that referendum itself: a focus on immigration over-riding a wider debate about free trade, and underpinned by the tempting and vague claim that, in an unstable, unfair world, control could be taken back. With any deal dependent on the agreement of twenty eight other countries, it has already proved a hollow victory.

For the last few months, these consequences of these two stages have dominated discussion, generating heat, but not light about what happens next. Neither has anything helped to bring back together those who feel their lives are increasingly at the mercy of a political and economic elite and those who fear Britain is retreating from being a world leader to a back water.

Little wonder the analogy most commonly and easily reached for by commentators has been that of a divorce. They speculate our coming separation from our EU partners is going to be messy, combative and rancorous. Trash talk from some - including those in charge of negotiating -  further feeds this perception. That’s why it is time for all sides to push onto Brexit part three: the practical stage. How and when is it actually going to happen?

A more constructive framework to use than marriage is one of a changing business, rather than a changing relationship. Whatever the solid economic benefits of EU membership, the British people decided the social and democratic costs had become too great. So now we must adapt.

Brexit should be as much about innovating in what we make and create as it is about seeking to renew our trading deals with the world. New products must be sought alongside new markets. This doesn’t have to mean cutting corners or cutting jobs, but it does mean being prepared to learn new skills and invest in helping those in industries that are struggling to make this leap to move on. The UK has an incredible and varied set of services and products to offer the world, but will need to focus on what we do well and uniquely here to thrive. This is easier said than done, but can also offer hope. Specialising and skilling up also means we can resist those who want us to jettison hard-won environmental and social protections as an alternative. 

Most accept such a transition will take time. But what is contested is that it will require openness. However, handing the public a done deal - however well mediated - will do little to address the division within our country. Ensuring the best deal in a way that can garner the public support it needs to work requires strong feedback channels. That is why transparency about the government's plans for Brexit is so important. Of course, a balance needs to be struck with the need to protect negotiating positions, but scrutiny by parliament- and by extension the public- will be vital. With so many differing factors at stake and choices to be made, MPs have to be able and willing to bring their constituents into the discussion not just about what Brexit actually entails, but also what kind of country Britain will be during and after the result - and their role in making it happen. 

Those who want to claim the engagement of parliament and the public undermines the referendum result are still in stages one and two of this debate, looking for someone to blame for past injustices, not building a better future for all. Our Marmite may be safe for the moment, but Brexit can’t remain a love it or hate it phenomenon. It’s time for everyone to get practical.