655.) I have long stated that the federal government underPresident Barack Obama has operated more like a communist dictatorship than afree Federal Republic. Now most timesthe progressives will storm this blog when I say that. Do you remember whenPresident Obama stole GM and gave it to the Unions? Remember how it was onlysupposed to be temporary? Remember how Ipredicted that the government would never give up its clutches on the company?Well Guess what….
GM has decided that it no longer can afford to be held underthe government’s oppressive thumb. The company has become concerned with thefact that they are surrounded by the stigma of being “government motors”. GMhas realized that being involved with the Feds is bad for business, as it hurtstheir image. Worse yet, the governmentimposed pay restrictions are chasing top talent away, hurting the quality ofthe product GM can produce. GM offeredto buy 200 million of the Federal Government’s 27% stake in the company, withthe remaining 500 million shares being sold in a public offering.
Well the nanny state has decided not to give up its share ofthe company, because it would be a financial disaster during an election year. GM stock as of Friday September 16th,2012 were trading at $24.14, if the stock were to be sold at those prices theFederal Government would lose $15,000,000,000.00 on the GM bail out. For youand I to even break even on the investment forced upon us by the federalgovernment, GM stocks would have to reach $53 a share. But don’t you worry the Federal Governmentwould consider possibly selling the stocks if it reaches the 30’s range.
Here is the rub; GM stock was re-launched after the bankruptcywith an IPO value of $33. It has yet to see that price sense. So the Federal Government is not sellingshares to a private company until it reaches a number it has seen in twoyears. I think the big governmentprogressives are just playing GM as a political trump card. They are notletting business leaders run the company. They are not doing what is best forthe company because a multibillion dollar loss during an election year does notmake for good political press.
I will be surprised if the government releases its grip onGM, it is too convenient of a pawn in their massive game of chess.
(Please note the sarcasm and the movie refrence in the title, its a joke don’t grab your torches and pitch forks.)