Updated May 27 at 7:27pm

GM soon free of U.S. control underscores auto comeback

WASHINGTON – A profitable General Motors Co. is poised to shake off a half decade of U.S. government oversight next month, underscoring the comeback of a once-moribund industry and gaining leeway … More

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GM soon free of U.S. control underscores auto comeback

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WASHINGTON – A profitable General Motors Co. is poised to shake off a half decade of U.S. government oversight next month, underscoring the comeback of a once-moribund industry and gaining leeway over a $26.8 billion cash pile that it can use to lure talent while weighing a dividend.

The U.S. Treasury Department expects to sell its remaining 31.1 million GM common shares by year-end, depending on market conditions, the government said yesterday. The exit would end restrictions on pay for top executives that the largest U.S. automaker has said hampered recruiting.

The sales mark the end of an era of U.S. government intervention in an industry that was near collapse in 2008, before bailouts from the administrations of George W. Bush and Barack Obama. The investment gave new life to GM and Chrysler Group LLC, slashing debt and rekindling growth. Auto sales are headed for the best year since 2007, and GM, Chrysler and Ford Motor Co., which didn’t get a bailout, are profitable again.

“The first step will probably be a dividend,” said Michelle Krebs, an analyst at auto researcher Edmunds.com. “That will be a significant move toward normalcy as they become a truly publicly traded company. They’ll also be able to pay executives more money, which has been a constant complaint.”

With government loans repaid and the Treasury out of GM, “people will feel really good about the company,” Mark Reuss, the Detroit-based automaker’s president for North America, told reporters Nov. 20 at the Los Angeles Auto Show. “It will help our sales when it goes.”

Chrysler valuation

In another sign of the industry’s rebound, Chrysler advisers are discussing a valuation of about $10 billion for the carmaker before an initial public offering that could take place next month, people with knowledge of the matter said yesterday. In 2009 the automaker was considered worthless and Obama had to personally intervene to save it from liquidation.

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