In light of the revelation that General Motors (GM) is again teetering on the edge of bankruptcy, President Obama’s declaration that he wants to replicate the auto bailout in “every industry” should send profitable manufacturers everywhere running for cover.
Only about one week ago, the President was stumping with this at a campaign stop in CO:
OBAMA: I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM’s number one again. Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
Yesterday, Forbes.com suggested that GM is on track to lose billions of dollars as the stock has lost almost 50% of its value over the past two years at the same time market share has also continued to decline, leaving the company in a perilous situation – and taxpayers holding the bag:
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.