When will the Federal government get out of General Motors? Likely not until the end of the summer, according to a new report out of Detroit.

In theory, the Treasury Department could divest itself of General Motors stock as early as May 22, which marks the end of the lockup period following last November’s initial public offering. A report in The Detroit News, however, has the Treasury Department holding onto GM stock until the company reports second-quarter earnings in August.

Even then, it’s likely that the government will sell down only a portion of their GM stock holdings, and may not sell off the last of the stock until sometime in 2012. Earlier speculation had the Treasury exiting the automaker by the end of 2011, as the financial loss on a short sale of the stock was viewed as less detrimental than spotlighting the automaker bailout during an election year.

The Treasury’s change in heart is based on GM’s current stock value. Officials are hesitant to offer the stock for sale now, as the per-share price is around $31.05, significantly less than the IPO price of $33 per share. The administration is hopeful that a good second-quarter performance could be enough to boost stock prices to more palatable levels, minimizing the loss and the accompanying negative media exposure.

Sources close to the matter say that the Treasury will use at least two additional sales to fully divest of GM stock, and that any sale is likely to be after the Labor Day holiday.

[The Detroit News]