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Feds begin pull back from managing General Motors operations

The federal government’s role in the daily operations of General Motors is expected to lessen in the wake of this week’s initial public offering (IPO) that yielded the company over $20 billion in cash and reduced the US Treasury Department’s stake in the company to 37 percent.

New cars on the lot at Martin Cadillac in Yonkers, New York. The federal government’s role in the daily operations of General Motors is expected to lesson in the wake of this week’s initial public offering (IPO) that reduced the US Treasury Department’s stake in the company to 37 percent.

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The federal government’s role in the daily operations of General Motors is expected to lessen in the wake of this week’s initial public offering (IPO) that yielded the company over $20 billion in cash and reduced the US Treasury Department’s stake in the company to 37 percent – much less than the government’s former 61 percent majority holding.

Ron Bloom, head of Treasury’s task force overseeing GM, told the Detroit News Saturday that as the company continues to sell stock, the government will begin stepping back to ensure that the company succeeds on its own.

"With the public owning more shares than we own, I think it is fitting and proper … that we tick back our engagement," Bloom said.

The IPO General Motors conducted Thursday was the largest in US history. The company sold 478 million of its 912 million shares at an average $33 offering price. GM’s stock closed at $34.26. To break even the company says it needs to sell its remaining shares at an average price of $52.80.

GM receive $49.5 billion in federal money to prevent collapse after years of struggling with $88 billion in annual losses since 2004, over $60 billion in debt and retiree obligations, and shrinking cash assets.

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