U.S. Rejects GM’s Urging to Sell Auto Stake

General Motors Co. has intensified its pressure on the Dept. of the Treasury to sell its remaining 26.5% GM holding, but the Obama administration is resisting, The Wall Street Journal reports.

The government, which acquired its shares as part of a $49.5 billion bailout of the company in 2009, is balking at a sale because of GM's low share price. The U.S. sold part of its stake for $33 per share at the company's initial public offering in November 2010.

GM chafes at the stigma of being known as "Government Motors" and says Treasury limits on executive pay are hurting its ability to recruit top talent. The newspaper adds that executives also are privately annoyed at restrictions on their use of corporate jets.

Earlier this summer, the company proposed buying 200 million of the 500 million GM shares the government owns, according to the Journal. It cites anonymous sources who say the company is urging the Treasury to sell the balance of its stock in a secondary public offering.

But at GM's Friday closing price of $24.14 per share, taxpayers would lose about $15 billion, the newspaper estimates. Such a huge loss would become an issue in the U.S. presidential campaign this autumn. For the government to break even, GM shares would need to reach about $53.