DETROIT — The U.S. government’s short stint in the auto business is coming to an end.
The Treasury Department said yesterday that it will sell its remaining stake in General Motors by early 2014, writing the final chapter of a $50 billion bailout that saved the auto giant but stoked a heated national debate about the government’s role in private industry.
Taxpayers are sure to lose billions of dollars in the deal, even though GM has bounced back from the darkest days of 2008, when it almost ran out of cash.
The company has racked up $16 billion in profits during the past three years and added more than 2,000 American workers. Now GM is looking forward to the day when it can shed the stigma of government ownership and bury the derisive moniker of “Government Motors,” which it says kept customers away from dealerships.
When the government sells its last GM shares, the Treasury Department projects that autos will be the biggest money-loser of all the corporate bailouts connected to the Great Recession. The government already lost more than $1 billion on the bailout of Chrysler, which has repaid all its loans.
Under the deal, GM will spend $5.5 billion to buy back 200 million shares from the Treasury, with the sale closing before year’s end. That will leave the government with 300 million shares, or a 19 percent stake, which it plans to sell during the next 12 to 15 months.
The Treasury Department has held the stock for more than two years while awaiting a better price. In a statement issued yesterday, it said the bailout protected the business at a critical time.
Treasury officials declined to answer questions from The Associated Press about why the government is selling now.
The government clearly waited until after the presidential election to unload the stake and close the bailout, which was a contested issue in the campaign between President Barack Obama and Republican challenger Mitt Romney.