The latest treasury reports have come out and it looks as if the U.S. Treasury stands to lose about $25.1 billion on the 500 million shares of General Motors stock it still owns if they sell now. However this is considered to be a low estimate because it was made when General Motor’s stock was at $22.20 per share. That was until August 17 and on that date, the shares were down to $22.01. Now even though this estimate has been reported, it doesn’t mean that the U.S. Treasury has any plans to sell at this time. The report was only an update. At this time, the U.S. Treasury would prefer to wait until the market catches back up to the progress General Motors feels it has made.
Previously the government had expected to lose $44 billion on the auto bailout. If the U.S. Treasure does decide to take the $26 billion dollar loss by selling the General Motors stock, and then adds in the $1.3 billion that was lost on the on Chrysler, the total is still a 33% improvement over the original estimates although that is looking at the best case scenario.
When the auto bailout was first in question, Republican presidential candidate Mitt Romney opposed it because he thought it would cost taxpayers too much money, but George W. Bush said there wasn’t time to have the automakers go through a bankruptcy process first and went ahead and gave about $25 billion to them in the final weeks he was in office. This means taxpayers ended up with a $1.3 billion loss on the $12.5 billion bailout of Chrysler.
“The auto industry rescue helped save more than 1 million jobs throughout our nation’s industrial heartland and is expected to cost far less than many had feared during the height of the crisis,” Anderson said.
Source Detroit News