	Introduction

In 2008 and 2009, collapsing world credit markets and a slowing global economy combined to create the weakest market in decades for production and sale of motor vehicles in the United States and other industrial countries. Both reorganized companies had sizable ownership stakes held by the U.S. government and the United Auto Workers (UAW) union's retiree healthcare trust. This left the government holding more than 900 million shares of common equity received in return for assistance from the Troubled Asset Relief Program (TARP). Sales of stock made at lower prices result in losses being recorded by the Treasury. New GM's stock was offered in an initial public offering (IPO) in November 2010, with the U.S. government selling more than 412 million shares, thus reducing the government's ownership share to 32%. The U.S. government began selling its remaining 500 million shares of New GM stock in December 2012, with the announced plan of divesting its remaining shares by early 2014. The final sales of GM stock closed ahead of this 2014 deadline, in December 2013. As a result of the economic crisis, the Company was compelled to seek financial assistance from the federal government. Exceptional labor and retiree health care costs. Corporate culture. U.S. Government Assistance to the Motor Vehicle Industry

The initial U.S. government loans to assist the U.S. motor vehicle and motor vehicle financing industries were made by the George W. Bush Administration in December 2008 and January 2009. These tax savings are not counted as part of TARP support. Brands were shed. Elements of U.S. Government Ownership

In addition to its ownership of GM, the U.S. government acquired large common ownership stakes in Chrysler, GMAC/Ally Financial, Citigroup, and AIG through TARP funds and other assistance during the financial crisis. Exercising managerial control was not a stated goal of acquiring shareholdings in these companies. It sold the remaining shares in stages, ending with a final sale on December 9, 2013. Figure 1 shows the ownership structure of GM in 2009 when the new company emerged from bankruptcy and its structure after the Treasury sold the last of its stock in December 2013. Assessing the Cost of TARP Assistance for GM

As detailed in the Appendix , the U.S. government through TARP aided the combined Old GM and New GM with approximately $50.2 billion in loans in 2008-2009. After the bankruptcy process in 2009, the government held the following assets: (1) 60.8% of the equity in New GM, (2) $7.4 billion in loans aiding New GM, (3) $2.1 billion in preferred stock, and (4) nearly $1 billion in claims on the old GM in the bankruptcy process. In assessing the extent to which the government has recovered its investment, economists might also include a number of other factors, such as the cost to the government to borrow the funds that it then provided to GM, a premium to compensate the government for the riskiness of the loans, and the cost to the government of managing the assistance given. No complete cost estimate has been performed since the final sale of GM stock.
In 2008 and 2009, collapsing world credit markets and a slowing global economy combined to create the worst market in decades for production and sale of motor vehicles in the United States and other industrial countries. Concern about the economic impact of a possible collapse of large parts of the U.S. automobile industry led both the Bush Administration and Members of Congress to seek legislative avenues to assist the automakers. Ultimately, General Motors Corporation (Old GM) and its successor General Motors Company (New GM) together received more than $50 billion in federal assistance through the U.S. government's Troubled Asset Relief Program (TARP). Using this assistance to restructure, GM closed plants, cut its hourly and salaried workforce, shed three brands, reduced debt, introduced new vehicles, and implemented changes to reduce retiree legacy costs.
In exchange for this financial support, the U.S. Treasury received 60.8% of the new company, with the rest of New GM held by the United Auto Workers (UAW) retiree health care trust fund, the governments of Canada and Ontario, and holders of Old GM's bonds. GM was not the only company that received TARP funds as a result of the 2008-2009 financial crisis. More than 700 institutions received support, with the U.S. government taking ownership stakes in five large companies: GM, Chrysler, GMAC (now called Ally Financial), AIG, and Citigroup. In general, ownership of private companies was not a goal of TARP, and the U.S. government has sought to reduce its ownership stakes when possible while maximizing the taxpayers' return from the assistance.
The federal government sold its shares in General Motors Co. in different ways over time, including (1) a large initial public offering (IPO) in late 2010, (2) sale of stock directly to GM in December 2012, and (3) ongoing sale of stock into the public market. For the U.S. government to have fully recouped the nominal value of its $50.2 billion assistance, the government would have had to receive an average price of more than $45 per share for its holdings. In reality, the government received between $27.50 and $38.32 per share as it sold stock between December 2010 and December 2013. GM stock reached its highest point since the 2010 IPO, nearly $42 a share, after the government finished selling its GM stock in December 2013.
Including both the sales of stock and principal recoupment, the government realized $11.2 billion in losses on the assistance for GM, which could be partially offset by $0.7 billion in net income for a final shortfall of $10.5 billion. With the final sale of stock, all of New GM's connections to TARP are complete. Restrictions arising from TARP participation, including a ban on New GM owning corporate jets, certain reporting requirements, and executive pay limits, have been eliminated.