U.S. government loses $11.2 Billion on GM bailout
WASHINGTON D.C. - The U.S. government lost $11.2 billion on its bailout of General Motors Co., more than the $10.3 billion the Treasury Department estimated when it sold its remaining GM shares in December, according to a government report released on Wednesday.
The $11.2 billion loss includes a write-off in March of the government's remaining $826 million investment in "old" GM, the quarterly report by a Treasury watchdog said.
The U.S. government spent about $50 billion to bail out GM. As a result of the company's 2009 bankruptcy, the government's investment was converted to a 61 percent equity stake in theDetroit-based automaker, plus preferred shares and a loan.
Treasury whittled down its GM stake through a series of stock sales starting in November 2010, with the remaining shares sold on December 9, 2013.
At the time of the December sale, Treasury put the total loss at $10.3 billion but said it did not expect any significant proceeds from its remaining $826 million investment in "old" GM, the report by the Office of the Special Inspector General for the Troubled Asset Relief Program said.
"The goal of Treasury's investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful," Treasury Department spokesman Adam Hodge said.
Last week, GM posted its 17th consecutive profitable quarter. Earnings, however, were hurt by a $1.3 billion charge for the costs of various recalls, including for faulty ignition switches on 2.6 million cars.
GM is under investigation by the Justice Department, U.S. auto safety regulators and Congressover its failure to detect the faulty ignition switch for over a decade. The U.S. Securities and Exchange Commission is also investigating GM.