US Treasury to exit GM investment within 12-15 months

PHOTO: US Treasury to exit GM investment within 12-15 months

WASHINGTON - The US Treasury said Wednesday it would sell its investment in US automaker General Motors, a stake it bought as part of a government bailout of the auto industry, over the next 12 to 15 months.

The announcement came as GM said it would buy 200 million shares of GM common stock held by the Treasury for US$5.5 billion (S$6.7 billion), or US$27.50 per share.

The Treasury, which currently holds 500.1 million shares of GM common stock, said the move was part of its "continuing efforts to wind down its investments in the Troubled Asset Relief Program."

"The auto industry rescue helped save more than a million jobs during a severe economic crisis, but TARP was always meant to be a temporary, emergency program," said Timothy Massad, assistant secretary for financial stability.

"Moving to exit our investment in GM within the next 12 to 15 months is consistent with our dual goals of winding down TARP as soon as practicable and protecting taxpayer interests."

GM Chairman and Chief Executive Dan Akerson called the development "an important step in bringing closure to the successful auto industry rescue."

Separately, GM Canada announced that production of the next version of the Chevrolet Camaro would be moved to Lansing, in the US state of Michigan, from Oshawa, Canada.

"Lower capital investment and improved production efficiencies were key factors in the business case," it said in a statement.

Production of the Camaro, the only rear-wheel drive vehicle currently being built at Oshawa, will be consolidated with the production of the Cadillac CTS and ATS at the Lansing Grand River Assembly Plant, it added.

In October, GM, the largest US automaker, posted a 12 percent drop in profit for the third quarter from a year ago, hit by losses in Europe.