The federal government is resisting a push by GM to sell its 26.5 percent stake in the automaker hoping to hold out and recoup more of the $50 billion it sunk into the company during the bailout,
The Wall Street Journal Reported.
Should the government divest itself of the 500 million shares it holds, it would lose about $15 billion. While the current GM stock price would have to more than double to $53 a share for the government to break even on the deal, Treasury might be willing to start selling if stock prices were in the $30s.
The Journal also reported there are political calculations at stake. GOP presidential nominee Mitt Romney opposed the auto bailout and should the government take a big loss on the deal it might harm the re-election chances of President Barack Obama.
GM officials are pressing for the sale to end government intervention in such things as executive pay, the use of corporate jets, and to lift the stigma of being known as "Government Motors," the Journal reported.
The auto bailout amounted to $85 billion that went to GM, Chrysler, and some suppliers. Chrysler is free from government control, having taken out a loan to pay the government back, the Journal reported.
© 2013 Newsmax. All rights reserved.