Canada has sold its last remaining shares in General Motors, ending a period of government investment in the American automaker.
The move was announced earlier this week, as the federal government sold 73.4 million shares in GM to Goldman Sachs. The Canadian government’s block of shares represent around 4.6 percent of GM’s outstanding stock.
At the time of the government’s announcement, Canada’s share of GM had a market value of US$2.7 billion ($3.5 billion), although we won’t know the final sale price until April 11 when the transaction is completed.
When all the i’s are dotted and t’s crossed, the Government Motors sobriquet, used by many critics of the government-managed bankruptcy and bailout of GM, will no longer ring true.
General Motors’ speedy progression through Chapter 11 proceedings — with unwanted assets hived off into Motors Liquidation Company, pension and healthcare liabilities restructured, and divisions shutdown (Saturn, Hummer) or sold off (Saab) — was aided by a healthy cash infusion from a group of three governments: the US federal government, provincial government of Ontario and federal government of Canada.
The US feds cashed out their last remaining GM shares in December 2013, realising a paper loss of US$10.5 billion ($13.8 billion); the US government spent US$49.5 billion to buy 500 million GM shares during the bankruptcy. The Ontario provincial government followed suit in earlier this year.
In exchange for Ontario and Canada’s participation in the bailout, GM limited job losses at its Canadian plants, as well as guaranteeing that a minimum number of models would be built north of the border.
The Canadian government, led by Stephen Harper’s Conservative party, is due to deliver its final budget of its current term on April 22; a federal election is scheduled to take place in the middle of October.