GM thinking about buying back more shares from U.S. government

General Motors Renaissance Center

According to three people familiar with the matter, General Motors executives have discussed buying shares from the U.S. Treasury Department to reduce the Obama administration’s 33 percent stake in the company.

While not decisions have been made on a purchase plan, GM is weighing options for its cash. The options include horing up its underfunded pension plan, paying off debt and funding new vehicle programs.

“In terms of uses of cash, we have clear, immediate priorities which include further strengthening our balance sheet and fully funding our pensions,” said GM spokesman Jim Cain. “Our objective is to fund our operations with cash and then return any excess cash to our shareholders. Nothing has been ruled in or out.”

David Whiston, an analyst with Morningstar Inc. in Chicago, said that GM could use $30.6 billion in cash and marketable securities it had at the end of the first quarter to reduce the U.S. government’s stake.

– By: Omar Rana

Source: Automotive News