U.S. Treasury Department reduced its projection of auto bailout losses

Article by Christian A., on October 8, 2010

From a $28 billion projection of taxpayer losses on the auto industry bailout last November, the US Treasury Department has now reduced its projection by 40% to $17 billion. Because of the rebound in the auto industry, General Motors Co. was able to repay $7 billion to the federal government and Chrysler Group was able to refund $1.9 billion.

In a review of the Troubled Asset Relief Program, the department said that Ally Financial, formerly GMAC Financial Services, has generated a profit this year in all four of its operating businesses.

The Oct. 5 report further stated that the projected cost of [the Automotive Industry Financing Program] has fallen, as an improvement is seen in the outlook for the domestic auto industry and the estimated value of Treasury's investments has increased.

The federal government’s bailout of the auto industry amounts to about $85 billion in loans and stock investments. This figure is inclusive of a $5 billion fund for auto suppliers that has since been canceled.

This report failed to name the sources of the auto industry losses. GM got the largest portion of the bailout. GM will soon have an initial public offering that will allow the government to recoup some of its investment.

The federal government owns 61% of GM and 9.85% of Chrysler. The report also states that the $17 billion lost to the auto industry is the second-largest amount anticipated from the government's bailouts.

The biggest loser under TARP is the housing mortgage modification program. Notably, the government has made profits on several bank investments. The $29 billion net loss under TARP is less than 10% of the $350 billion in taxpayer losses that the Congressional Budget Office once projected. [via autonews - sub. required]

If you liked the article, share on:

Comments

Recommended

McLaren has already shown some interest in electrifying their models. And initially, we thought that they will just use hybrid systems to use across their current lineup. Nevertheless, we have...
by - August 19, 2017
Fifty years after its glorious victory at the 24 Hours of Le Mans, Ford launches the 2018 Ford GT ’67 Heritage Edition at the 2017 Monterey Car Week. The red...
by - August 18, 2017
Hyundai has recently unveiled an unnamed pre-production model of its new fuel cell SUV. We don’t know what to call this model just yet, but sources say that this model...
by - August 18, 2017
This weekend at the 2017 Pebble Beach Concours d’Elegance, the BMW Z4 Concept will make its first public appearance. The good news is that we will finally have a real...
by - August 18, 2017
While Honda’s new 2018 HR-V will be rolling out at the dealerships with just a few updates, the company is certainly not giving up its spot as the best-selling vehicle...
by - August 18, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries