The United States Treasury Department is expecting to post a loss of $9.7 billion for selling its stake in General Motors that it received in 2009 as part of the carmaker’s bailout. The government, through the Troubled Asset Relief Program, has provided $49.5 billion in loans to GM, but has yet to recover $14 billion, according to a quarterly report published by the special inspector general for the program.
The figure includes the GM shares already sold as well as the dividend and interest payments. The Treasury once held 912 million shares in GM, for a 60.8-percent stake. The department has already sold 811 million of them as of Sept. 26, and the US government now only owns 7.3 percent of GM, equivalent to around $3.6 billion based on the carmaker’s current stock price.
According to the report, GM’s stock price would have to quadruple to more than $140 for taxpayers to break even on the remaining shares.
Despite the losses, the Obama administration and most industry experts say that if not for the bailout, GM would have been liquidated, resulting to hundreds of thousands of job losses in the US. A GM spokeswoman, in an e-mailed statement to Automotive News, suggested that the carmaker’s products show that it has made the most of its bailout.
She said that GM is ”rapidly becoming the company that everyone hoped when the government rescued the auto industry.” She added that GM is "producing cars that win in the marketplace under sound, smart management." The government is currently on its way to divest all of its GM shares by the end of March 2014. The Treasury sold $570 million in GM stock in September.