Corker bill could force GM stock dumping

Senator Bob Corker of Tennessee, who was a spokesman for allowing domestic automakers to be liquidated until he discovered a GM plant in his state, and Mark Warner of Virginia have announced their intent to introduce a bill demanding “oversight” of companies more than half-owned by the government, which would include AIG, Citigroup, and General Motors. “Oversight” would come from a three-member board, which would be ordered to sell government stakes by December 2011.

The deadline, though it might be possible to override, could result in the government losing billions if it had to drop its stake at once, or by a predetermined schedule known to speculators. Likewise, if the three-member board was ideologically averse to any government investment, they could divest government shares too early, again losing billions in potential revenue or expense recouping. Corker did not announce how the members of the board would be chosen, but his past statements regarding the auto industry have not shown a strong understanding of business.

Of note, Corker was quoted in October 2008 as saying:

Through this rescue plan, we will purchase assets that will hopefully produce gains, and 100 percent of any income made will go toward paying down the debt. If our resources are invested properly, the federal government will get all of its money back and taxpayers may even see a return on the investment.

This indicates that his anger at government ownership of assets may change depending on the leader of the government.