A Treasury Department reports shows that the government expects to lose over $25 billion on the $85 billion auto bailout, 15% more than the last forecast.
Friday, August 10th, the Congress received the Obama administration monthly report in which it stated that it expects loses of over $25.1 billion, up from the last forecast of $21.7 billion. The losses may be higher since they were calculated when GM’s stock price was $22.20 a share, and on Monday it reached $20.47, which means other $850 million losses on the automaker’s bailout. The government owns 500 million shares in GM, which need to be sold at $53 each to recover the $49.5 billion bailout.
“The auto industry rescue helped save more than 1 million jobs throughout our nation’s industrial heartland and is expected to cost far less than many had feared during the height of the crisis,” said Treasury spokesman Matt Anderson.
The initial loss was estimated at $44 billion, but in December 2009 it was reduced to $30 billion. Taxpayers also saw a $1.3 billion loss due to the $12.5 billion bailout of Chrysler. The government, which owns 74% stake in Chrysler has offered a $17.2 billion bailout, but recovered $5.7 billion.