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]