Any politician who promised you that these bailouts were “revenue neutral” lied.
Wednesday, 30 Oct 2013 07:36 AM
The U.S. Treasury’s bailout fund has lost about $9.7 billion on its rescue of General Motors Co. and would need to sell its remaining shares in the automaker for an average of $147.95 to break even, a report to Congress said. That would be four times the current price of the shares.
The Special Inspector General for the Troubled Asset Relief Program in a report issued Tuesday estimated the realized losses on all GM shares sold from November 2010 through Sept. 13, 2013 at $9.7 billion.
At that point, the U.S. owned 101.3 million shares. If it sold those for Tuesday’s closing price of $35.80 a share, the government would lose almost $800 million more, bringing the total loss to about $10.5 billion.
The U.S. investment in GM was the biggest piece of an industry bailout that became a centerpiece of President Barack Obama’s first term.
The Treasury has said it will sell its shares by early 2014. GM Chief Executive Officer Dan Akerson has said the government may exit before the year is over.
GM shares closed Tuesday at $36.06. The restructured company held its initial public offering in 2010 at $33 a share. The shares gained 25 percent this year, exceeding a 24 percent gain for the Standard & Poor’s 500 Index.
“General Motors’ energies are fully focused on designing, building and selling the world’s best vehicles,” said Heather Rosenker, a GM spokeswoman based in Washington, declining to comment directly on the report.
The government is exiting GM as investor confidence has risen while the company introduces 18 new or redesigned vehicles in the U.S. The product surge is transforming its lineup into one of the freshest in the industry from one of the oldest.
The auto rescue saved 1.14 million jobs in 2009 at automakers and companies that depend on the industry, according to the Center for Automotive Research.
A collapse would have reduced personal income in the U.S. in 2009 and 2010 by $96.5 billion, costing the federal government $28.6 billion in extra jobless benefits and reduced Social Security contributions and income taxes in those years, the center said.
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