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Watchdog: Unlikely That Taxpayers Will Recover $81 Billion Given to GM & Chrysler
November 02, 2009 2:36 PM
ABC's Matt Jaffe reports from Washington:
On the same day that Ford -- the one member of Detroit’s Big Three that did not receive a taxpayer bailout -- reported a quarterly profit of nearly $1 billion, a government watchdog warned that taxpayers are unlikely to recoup all of the $81 billion the Treasury Department has invested in General Motors and Chrysler.
In a new report released Monday afternoon, the Government Accountability Office stated, “Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially above what they have been in the past.”
Since December 2008, Treasury has invested $81.1 billion in the two automakers, more than 12 percent of the total funds available from the $700 billion Troubled Asset Relief Program.
The government now has a 60 percent equity stake in the new GM and a 9.85 percent stake in the new Chrysler.
At the present time, the GAO noted, “The companies still struggle to remain competitive with other automakers and to regain market share.”
But the GAO also said that Treasury’s investments in the two automakers have “contributed to the stability of Chrysler and GM”.
Treasury officials told the watchdog that they will consider all options for selling the government’s ownership stakes in the two automakers, but officials did say that the most likely plan to dispose of the GM stake is through a series of public offerings, while the most likely option for the Chrysler stake is a private sale.
The timeframe for the government to give up its stake in the automakers remains unclear.
In the past, Treasury officials have said that a public offering for GM could occur sometime in 2010, but two independent experts told the GAO that GM might not be ready for a successful IPO by 2010 because the company may not have demonstrated sufficient progress to generate investor interest by then.
In a letter to the GAO in response to the report, Duane Morse of Treasury’s Office of Financial Stability said that Treasury “will continue to monitor and evaluate the performance of Chrysler and GM with an eye toward determining the appropriate method and timing for divesting Treasury’s interests in the auto companies.”
November 2, 2009 | Permalink | Share | User Comments (67)
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Why would the taxpayers not get their money back? If GM stays in business then they can pay back the loans over time with intrest, if they go out of business then we like any other loan agent should go after all their property and sell it off and recover what we can. Also if they are having problems paying their debt any raises or fancy perks are out of the question for the leaders of these companies. We as taxpayers will not allow the leaders of this government just to throw our hard earned money away, if the congress does not pursue re-payment then we may have to re-think their own job security and place pepole that will do our bidding in their seats of office.
Posted by: tealtripod55 | Nov 2, 2009 3:09:47 PM
no way
Posted by: Huh | Nov 2, 2009 3:12:23 PM
I'm not surprised to hear this.
Will we get anything back?
I agree that if they do manage to stay in business over a period of time, they can begin to pay us back at that time.
Who's keeping the books? An audit is called for each and every quarter.
As a taxpayer and "part owner", I demand audits!
Posted by: ddg | Nov 2, 2009 3:16:58 PM
I never thought we would get it back...I also thought we never should have gave it in the first place...
Posted by: dk | Nov 2, 2009 3:45:39 PM
Come people. Did you not know this was going to happen?? Lots of people and professionals warned us about this but you where all sold a bill of goods. They should have been left alone and let the cards fall. Just like health care. The bill of goods is being sold to you all and you beleive the costs is next to nothing. what about after 10 years?? what is the cost then?? No one knows but it aint cheap. For you dems aint means -is not.
Posted by: Jim Rod | Nov 2, 2009 3:45:46 PM
As majority of public expected from the beginning.
We are not so dumb as our government expects.
Posted by: Paperwhite | Nov 2, 2009 3:48:28 PM
Every tax paying citizen should AT LEAST recieve a brand new car that they have been overcharging us for for years.
Posted by: Beth | Nov 2, 2009 3:55:45 PM
Who's keeping the books? An audit is called for each and every quarter.
As a taxpayer and "part owner", I demand audits!
ddg | Nov 2, 2009 3:16:58 PM
Is this sarcasm, or are you really ignorant of the work of the GAO and SIGTARP? Your demand for audits would be a hair more compelling if you bothered to, you know, read the audits behind headlines such as this.
Posted by: jhw539 | Nov 2, 2009 4:02:23 PM
There is no excuse that they would not be expected to repay this debt to the American people, no matter how long it takes! Its called a Liability and carried on their Balance Sheet!!!
They should have been allowed to go bankrupt. I will never buy a car from Goverment Motors or Chrysler again.
Posted by: HH | Nov 2, 2009 4:05:26 PM
You know why people were mad about this
whole bailout mentality? Anyone with
half of a brain knew the likelihood
of getting any of the money back was
merely a dream. There is nothing new
in this revelation. Just wait until the
rest of this stuff hits the fan. We
ain't seen nothing yet.
Posted by: wis134 | Nov 2, 2009 4:08:53 PM
We should have let them go bankrupt in the 1st palce and kept the money. The money did not stop them from going under so it was just a waste.
Posted by: 'Un-American' | Nov 2, 2009 4:12:32 PM
What makes you people THINK the Federal government is "American"?
Posted by: August | Nov 2, 2009 4:16:00 PM
We have been robbed and its all legit. So far I don't see much difference between Bush and Obama. It seems regardless of party they have the same puppet masters. What the heck is going on in Washington? I say lets drag those politicians out and bring back the guillotine. Now thats reality TV i'd watch.
Posted by: NewAmericanow | Nov 2, 2009 4:24:36 PM
Are we supposed to act surprised about this? okay here I go.... *GASP*!!!!!
Posted by: pir808 | Nov 2, 2009 4:30:37 PM
Imagine how much worse this could have gotten without all of this government intervention? But it is coming at an unbelievable cost, one that will be paid for for years to come!
Posted by: Marc | Nov 2, 2009 4:43:45 PM
I'd like a loan that I didn't have to pay back!.....
Posted by: NM | Nov 2, 2009 4:48:15 PM
So we get nothing for our money, but Obama and his crooked administration got votes and money donated to them via unions. Gee thanks politicans...NOT. Why aren't these crooks in jail.
Posted by: VeryPainfulTruth | Nov 2, 2009 4:50:08 PM
No surprises in this article. Glad I bought Ford stock when it was 2.10 a share :)
Posted by: Alex | Nov 2, 2009 4:54:48 PM
And this comes as a shock to who?
Never again will I buy GM (Government Motors).
Posted by: CC | Nov 2, 2009 5:08:13 PM
the UAW manipulated obama into bailing them out and giving them ownership of GM. now, to ensure their support, democrats will have to keep the company in it's zombified, undead state on life support. get used to it folks. the UAW is now a permanent charity case for the government...another "entitlement" spending pig slopping at the public trough. "saving" GM was never about saving the company; rather, it was about saving the jobs of UAW workers. now, every paycheck cut to UAW workers is a glorified welfare check.
Posted by: davidfrat21 | Nov 2, 2009 5:09:16 PM
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