Taxpayers’ loss on GM bailout looks to be about $10 billion
The U.S. Treasury’s deal to sell 30 million shares of General Motors Co. will recoup taxpayers another $1 billion of the bailout money the government put into the automaker back in 2009.
All told, taxpayers have recovered $32.5 billion of the $49.5 billion used to restructure the nation’s biggest automaker. The government also still owns 189 million GM shares, worth about $6.5 billion at the $34.41 share price that the Treasury got for the batch of stock it sold this week.
If the Treasury is able to liquidate its remaining stock, as it plans to do over the next 15 months, at that price or above, the government will still be short about $10 billion on its GM investment.
However, Treasury officials say that the goal of the auto industry bailout was to save the industry and jobs rather than make a profit on the investment.
To date, the Troubled Asset Relief Program (TARP) that funded the bailout of GM and other companies has recouped over 95%, or $399.40 billion, of the $420 billion it disbursed, the Treasury Department said.
GM has been consistently profitable since it emerged from bankruptcy almost four years ago. Although it and other automakers are losing money in recessionary Europe, GM is gaining ground in its core U.S. market.
Through the first five months of this year, GM has sold almost 1.2 million vehicles in the U.S., an 8.3% gain from the same period a year earlier. The nation’s largest automaker also has brought its share of the U.S. market up to 18% from 17.8% during the same period a year earlier.