US set to sell GM, Chrysler shares
Task force chief gives no timetable
DETROIT - The federal government plans to sell its shares in General Motors Co. and Chrysler Group LLC as soon as it can, the head of the autos task force told a congressional panel yesterday.
“We are very eager to dispose of them as soon as possible,’’ said Ron Bloom, chairman of the Treasury Department task force overseeing GM and Chrysler. “On GM, our expectation is a GM IPO in 2010.’’
Bloom said the government would not sell all of its shares at initial public offerings as it could get more money following an IPO should shares of the company rise. He did not give a timetable on such a sale of GM or Chrysler stock.
The US government owns 61 percent of the new GM and 8 percent of Chrysler. The task force is overseeing the two companies because they have received $65 billion in federal aid.
New versions of GM and Chrysler recently emerged from short stays in government-funded bankruptcy protection, cleansed of old debt and burdensome contracts.
Bloom would not articulate any particular financial or operational milestones GM or Chrysler have to reach before the government would cash out its stock.
“It’s going to be based on the situation,’’ he said, adding that success would be measured in the taxpayers’ ability to get their money back.
GM’s treasurer, Walter Borst, testified that GM would seek to repay its loans faster than the six-year time frame outlined by the autos task force. He added that GM is now working on “fresh start’’ accounting measures that companies use to reorganize their books following a trip through bankruptcy court.
Jan Bertsch, senior vice president and treasurer for Chrysler, said the company would be able to service all of its debt.
“Our goal is to pay that back,’’ she said of the government loans. “We see no issues paying it back.’’
Also at the hearing, Bloom denied the government had coerced Chrysler’s debtholders into dropping a legal protest that they were being treated unfairly in court. Some holders of $6.9 billion in secured Chrysler debt initially protested they were being pushed behind unsecured creditors such as the United Auto Workers union’s retiree healthcare trust but dropped their protests after receiving $2 billion to wipe out their debt.
Bloom said he spoke to former task force chief Steven Rattner, who denied making any threats to any of the lenders. Some of the lenders had received government money from the bank bailout program.
Rattner stepped down from the task force July 13 and was replaced by Bloom, a former United Steel Workers union official.
The administration said Rattner decided to return to private life and his family in New York City. It remained unclear whether the departure had anything to do with the ongoing public corruption probe nibbling at Rattner’s heels in New York.