Obama's former "car czar" and Willett Advisors chairman Steven Rattner said now is not the time for the U.S. government to sell its stake in General Motors.
Any sale should wait until 2013 or even 2014, said Rattner, who led the Obama administration's restructuring of General Motors and Chrysler from 2008 through 2009..
"I personally believe there's a lot of value in GM stock that's been badly treated by Wall Street," he told CNNMoney at the Milken Institute Global Conference in Los Angeles.
Shares of GM have dropped roughly 30% since the automaker went public in November 2010. "The Treasury always assumed it would hold onto it for awhile maybe as long as five, six, or seven years," said Rattner.
In late 2008, the U.S. Treasury spent roughly $50 billion for a 61% stake in GM.
Since then, the government has managed to cut that stake in half but it's still owed $27 billion. For taxpayers to break even, GM's stock needs to more than double to $51.
Rattner admits that calculating when to sell the remainder is both an economic and a political issue. "I don't think that selling it in the heat of an election year makes financial or political sense," he said.
The presumptive Republican presidential nominee Mitt Romney has pushed to make the sale of the government's GM stake an election year issue.
"The shares need to be sold in a responsible fashion and the proceeds turned over to the nation's taxpayers," the presidential hopeful wrote in the Detroit News in February.
While calling GM's shares undervalued, Rattner said that the Detroit automaker still must work to make the company more "lean and mean." To do so, Rattner said General Motors must rethink its middle management process and cut down decision making time.
"Car companies got in trouble, because they didn't have the right products," he said. "Now they have better products, but they need still better products."
Just this week, General Motors raised its full-year forecast for light vehicle sales to between 14 million and 14.5 million from 13.5 million to 14 million, despite reporting an 8% drop in overall sales last month.
With GM's record profit growth last year, Rattner said he doesn't expect further job or wage cuts.