The loss incurred of the United States government on its bailout of General Motors Co. has reached $11.2 billion,which is considerably more than the $10.3 billion estimate given by the Treasury Department when it sold its remaining shares in December 2013, according to a recently released quarterly government report. The $11.2 billion figure entails a write-off in March of the remaining $826 million investment in "old" GM.
The US government invested around $50 billion to rescue GM from bankruptcy, resulting to 61-percent equity holdings in the carmaker, plus preferred shares and a loan. The Treasury little by little sold its stakes in GM, with the last of them sold on December 9, 2013.
By then, Treasury pegged the government’s total loss at $10.3 billion, but said it is not expecting any significant proceeds from its $826 million investment in "old" GM, according to the report by the Office of the Special Inspector General for the Troubled Asset Relief Program.
Treasury Department spokesman Adam Hodge said reiterated that the goal of the GM investment was never to make a profit, but to help save the American auto industry, noting that it was a successful effort.
The US government’s rescue of GM and Chrysler Group, which was granted with around $12.5 billion, managed to save 1.5 million jobs in the US, according to the Center for Automotive Research.
GM logged its 17th straight profitable quarter, but its earnings suffered from a $1.3-billion charge for the costs of different recalls. The Justice Department, National Highway Traffic Safety Administration and the US Congress are probing GM over its failure to detect the faulty ignition switch for over a decade.