In case you were tempted to think that the news about General Motors paying back all of its loans from the federal government would put an end to that auto bailout fiasco started under the Bush administration, think again. General Motors has, indeed, paid back all of the loans from the government. But the feds still have a controlling 61% stake in the company.
GM is still very much government motors.
GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. At first the entire amount of U.S. aid was considered a loan as the government tried to keep GM from going under and pulling the fragile economy into a depression.
But during bankruptcy, the U.S. government reduced the loan portion to $6.7 billion and converted the rest to company stock, while the Canadian government held $1.4 billion in loans. Those loans were repaid Tuesday, five years ahead of schedule.
The automaker hopes to begin repaying the remaining $45.3 billion to the U.S. government and $8.1 billion to Canada via a public stock offering, perhaps later this year. The U.S. government now owns 61 percent of the company and Canada owns roughly 12 percent.
Meanwhile, despite the President saying he wasn’t interested in managing auto companies, the Obama administration continues to manage how General Motors operates its assembly plants.