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Government sells last of its GM share

U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today.

The taxpayer loss on the GM bailout finishes at $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stock, and had put $49.5 billion of taxpayer money into the GM bailout.

The total taxpayer bailout to GM rises to $51 billion including another $1.5 billion Treasury put into programs to keep GM suppliers afloat and to make sure owners’ warranties were honored, plus some into the old GMAC finance company that’s now known as Ally — separate from a much larger Ally bailout.

That $1.5 billion didn’t go directly to GM, but was spent largely on its behalf.

GM shares closed today up 73 cents, 1.8%, at $40.90 — record closing price.

Within a few minutes of market close, the shares zipped to $41.50, then sagged back toward the closing price.

The Treasury announcement might have nothing to do with the advancing share price. “People have been factoring this in for awhile,” GM CFO Daniel Ammann said in an interview with USA TODAY.

Instead, Wall Street analysts have bee talking up the stock lately.

Ryan Brinkman at J.P. Morgan, for example, has said in recent reports that GM is worth $52.

And Wall Street has been saying that once the government holds no stake in GM, the car company would be free to resume paying dividends.

“The U.S. Treasury’s ownership exit closes just one chapter in GM’s ongoing turnaround story. We will always be grateful for the second chance extended to us and we are doing our best to make the most of it,” DEO Dan Akerson said in a statement.

At GM, the end of government ownership means:

•The automaker can pay its executives whatever it wants to. While Treasury owned share, the pay of GM’s top brass has been capped at a percentage of what other companies are paying. CEO Dan Akerson has said the pay cap could keep him from hiring the best talent, which would harm GM in the long run even though it saved money temporarily.

•GM now should be free and clear of the “government motors” slur flung at it by opponents of using taxpayer money to bail out corporations. Still, some die-hards no doubt will continue using the term to remind people the automaker needed to feed at the public trough to stay alive.

“I don’t think there’s anything fundamental that changes,” Ammann said, because there has been “no operating involvement of any kind from the Treasury, other than the compensation restrictions. We have been running the business for all the shareholders.”

The administration emphasizes that the loss it took on GM shares is far less costly than had GM been allowed to fail.

“Inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production,” Treasury Secretary Jacob Lew said in a statement announcing that Treasury had sold all its remaining shares.

GM and Chrysler both went through government-scripted Chapter 11 bankruptcy reorganizations. Treasury put $12.3 billion into Chrysler and recovered $11.13 billion of that. Chrysler no longer is involved in the bailout.

James R. Healey, USA TODAY

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