Gm Plan

To: Bob Maddamma

Treasury Secretary

From: Yixuan Mao

Analyst at Treasury Department

Date: November 15, 2012

Re: Recommendation on GM Buy Back Plan

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After reading Jeff Bennett and Sharon Terlep’s article, “U.S Balks at GM Plan” from Wall Street Journal in September 17, 2012. I would like to make a recommendation on whether allow GM to buy back 200 million shares of stock from the 500 million acquired by the Treasury during the auto bailout or not.

Currently, General Motor Co. executives want us to sell off our 26.5% stock in GM Company, because GM thought “the U.S’s shadow is a drag on its reputation and hurts their ability to recruit talent due to the government restrictions.” However, if we accept the plan by GM during the auto bailout, we will bear the largest loss we ever seen. The reason as followings:

• Currently the share price of GM is around $24, which below the price when we buy them. We would bear lose around $15 billion on the GM buyout. We should wait a good time, which the price reaches the breakeven point at $53/share to sell off GM’s stocks.

• “GM shares have been trading well below the $33 initial public offering price of 2010.” Many analysts on Wall Street thought GM shares will reach $50 within a year, if we sold a major chunk of our stake in the auto maker. So, we can sell some other auto maker’s share in order to the future increase of price of GM’s stock.

• The election contest is coming in next few months. Deal with this plan at this time, will effect on Obama administration as well as taxpayers. “Huge losses on taxpayer investment in the auto maker’s stock could tarnish the administration’s overall record in recovering crisis-era bailout money.” We should take care of the return of taxpayer.

• Obviously, it is not a good time for us to accept the buyback plan by GM right now. And also, we are not...