Ontario Tells Canadian Government That It Is Time To Move On And Sell GM Stock At A Loss

Ontario Finance Minister Dwight Duncan says it’s time for the government to get out of the auto business, calling on Ottawa to unload shares of General Motors even as the stock trades at less than half the price taxpayers would need to get their bailout money back.

More than three years after the two governments contributed $13.7-billion toward an unprecedented bailout of the North American auto sector, one of the main players in that decision is showing little interest in playing the long game with the remaining government-owned shares of GM.

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Steve - 12/2/2012 1:42:57 PM

+2 Boost

What those Canadian are telling their government, is "let's call a spade a spade!" The Feds bought GM shares as several times market value (last trading price of the bankrupt GM, or the IPO price of the New GM). It's like your college kid being in trouble, so you offer to buy his shoes from him at $1000 per pair.

On one hand, the purchase can be positioned to the public as simply buying some goods (company shares, or old shoes). In reality, the truth is that the "buyer" and seller have worked out a way to pump a lot of money into the seller's pockets, which the buyer will NEVER get back. That's not a purchase. That's a gift. Or in more accurate terms, with respect to GM, it's a big fat bailout!

When analysts first heard of this purchase, they immediately realized that the Feds will never get their money back, because GM stock value is unlikely to rise to the book value of those shares in any living person's lifetime (with the possible exception of newborn babies).

The Canuks realize this, and are urging the government to just own up to what really went down, and to declare their losses now, rather than continuing to pretend that they own something of value.

In my opinion, I say hold on to those shares! Let the public sneer at "Government Motors." Let GM continue to carry the stigma of a massive bailout, deceptive practices, and enormous executive bonuses as the dead enterprise was put on government (AKA tax payer) life support. Keep the shares to remind GM they shafted the American citizens by screwing up a once-great company, and driving it into the ground, and then leeching off hard-working Americans to line their own millionaire pockets. These shares are a thorn in GM's side, and I say it serves them right.

In my opinion, if GM wants to be known as a great company, they should pay back the "gift" the American tax payers were forced to give up by Federal Government hands, and buy back those shares at book value, and pay back the money you took from them through grants and other bailout schemes. If you did this, the good America people MIGHT view you as a company that does the right thing, even though your products are not yet world-class. And they might stop hating you.