Wednesday, September 18, 2013

Taxpayers set to lose $15 Billion on auto bailout

English: Logo of General Motors Corporation. S...
The U.S. Treasury is accelerating its sell-off of stock in General Motors Co., which likely will be free of the moniker “Government Motors” by spring.

The pace of the sell-off has picked up: The government sold an average of 19 million shares in the early part of the year, but since May has sold more than 25 million a month — plus a one-time special sale of 30 million in June, worth more than $1 billion, to coincide with GM’s return to the S&P 500.

U.S. taxpayers acquired 912 million shares of GM in exchange for a $49.5 billion bailout that began in 2008, under President George W. Bush, and mushroomed the following year under his successor, President Barack Obama.

“We remain on track to complete our exit from GM by early next year,” Tim Massad, the Treasury’s assistant secretary for financial stability, said Tuesday.

GM’s stock closed Tuesday at $36.71. At current trading prices, the government’s remaining stake is worth about $3.7 billion. From previous stock sales, the Treasury has recovered $35.4 billion of its GM bailout, and at current stock prices, taxpayers would have lost about $10 billion on the bailout.

The Treasury estimates taxpayers will have lost $15 billion on their $85 billion auto industry bailout, which also included aid to bankrupt Chrysler. Auburn Hills-based Chrysler has repaid its debt. Read more >>
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