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Monday, 02 June 2014 23:36

U.S. Government Says It Lost $11.2 billion on GM Bailout

The U.S. government lost $11.2 billion on its bailout of General Motors (GM), more than the $10.3 billion the Treasury estimated, when it sold its remaining GM shares in December 2013. The $11.2 billion loss includes a write-off in March 2014 of the government’s remaining $826 million investment in "old" GM. The U.S. government spent about $50 billion to bail out GM. During the GM 2009 bankruptcy, the government’s investment was converted to a 61 percent equity stake in the automaker, plus preferred shares and a loan. The US bailout of GM and Chrysler saved 1.5 million jobs in the U.S., according to the Center for Automotive Research in Ann Arbor, MI. GM just 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 Congress over its failure to detect the faulty ignition switch for over a decade. The U.S. Securities and Exchange Commission is also investigating GM.

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