..U.S. May Not Recoup Auto Investments, Report Says

[WriteDown]

Source: NYT

DETROIT — A government report released Monday concludes that taxpayers will probably never recoup all — or even close to all — of the $67 billion that the Treasury Department loaned to General Motors and Chrysler in the last year to prevent their collapse.

The report, by the Government Accountability Office, estimates that G.M. and Chrysler would need to be worth a combined $121.7 billion, or roughly 30 percent more than their values about a decade ago, in order for the Treasury to break even on its investments. The report said it already was assuming that $6.4 billion of the money loaned to the carmakers before their bankruptcies would not be repaid.

“Treasury is unlikely to recover the entirety of its investment in Chrysler or G.M., given that the companies’ values would have to grow substantially above what they have been in the past,” the report said.

The companies’ current value and recent financial performance are unknown because neither one is publicly traded. The report said that G.M. had agreed to file a third-quarter and 2009 full-year earnings report by March 31, 2010, but that there was no such agreement with Chrysler. Both companies must file frequent financial summaries with the Treasury as long as their loans are outstanding, however.

The Treasury Department hopes to have an initial public offering of G.M. shares as soon as 2010, and a sale of its share in Chrysler would occur at some point after that. It owns 60.8 percent of G.M. and 9.85 percent of Chrysler, whose majority owner is the United Automobile Workers union’s retiree health care trust....

Read more: http://www.nytimes.com/2009/11/03/business/03gao.html

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Of course not.

[jimshoes]

1. Just as long as those credit defrault swaps get paid

off, screw the taxpayers.
defrault? It's been a long day.

[ixion]

2. To the people who gave me crap when I said we'd never see that money again:

I'll be looking for the apology that is owed to me.

[bemildred]

3. Well, fortunately it was fake money, like all the money these days, so it doesn't matter. nt

[Psephos]

6. It was borrowed money, and is exceedingly real to those to whom it must be repaid. n/t

[Grassy Knoll]

4. Ever notice the teabag express doesn't come near Detroit.....

How many auto workers and their family's will get to have a happy holiday because of Obama.
I will take saving a family from poor status , to killing more soldiers any day.
Fuck victory in a wrong war, stop spending blood money, and give it back to your country.

[fujiyama]

5. It may have costed the federal government much more

if GM and Chrysler had been forced into liquidation. It's hard to figure how many suppliers would have shut down, causing reverberating effects throughout MI and the entire Midwest in general. It's been really bad as it is, but it could have been much worse.

On edit: The auto bailout was handled fairly well, unlike the financial bailouts which was basically a wholesale looting of the treasury. It was nothing more than legalized theft.