GM fears U.S. control could hurt in long run

May 14, 2009

GM fears U.S. control could hurt in long run

It says influence may harm stocks, competitiveness

BY TIM HIGGINS
FREE PRESS BUSINESS WRITER

While the federal government has at least temporarily rescued GM with billions in loans, the automaker warns that U.S. involvement could have a negative effect in the longer term.

As a majority owner in General Motors Corp., the U.S. government could make it difficult to compete with other automakers and could influence business strategy in a way that harms the stock price, the automaker said in a recent regulatory filing.

GM, which is staying afloat with $15.4 billion in federal loans, proposes to restructure its debt through a complicated deal that would end up giving the U.S. government at least half of the reconstituted company.

The troubled company told the Securities and Exchange Commission that the government’s interests might differ from those of other shareholders.

"We may … become subject to new and additional government regulations regarding various aspects of our business as a result of the U.S. government’s ownership in (and financing of) our business," GM said. "These regulations could make it more difficult for us to compete with other companies that are not subject to similar regulations."

The White House has stressed that it does not want to manage GM’s day-to-day business. "I don’t want to run auto companies," President Barack Obama has said.

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