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

Honda this week announced that its all-new 2018 Clarity Plug-in Hybrid will arrive at US dealerships with a starting price of $33,400 beginning on the first of December. Because the...
by - November 21, 2017
Lamborghini had been expected to refresh its entry-level model – the Lamborghini Huracan – in late 2018 or early 2019. But here is some good news for fans of the...
by - November 20, 2017
The Chevrolet Corvette will be turning 65 years old in 2018, and as part of the celebrations, the brand is introducing a special edition C7 – the Chevrolet Corvette Carbon...
by - November 19, 2017
Tesla revealed that with its new Semi, truck drivers can expect better experience especially with heightened safety and the lower cost of transporting cargo. Indeed, the cabin of the new...
by - November 19, 2017
November 17 is considered a very special day for Tesla, as this is the day that they revealed the highly anticipated Tesla Semi. But Elon Musk did not think the...
by - November 17, 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