JW Probe: U.S. Lost $1.6 Bil in GM This Year, More to Come
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The U.S. government continues hemorrhaging huge amounts of money on General Motors, despite the fanfare about the automaker repaying billions in government loans, a Judicial Watch investigation has found.
Since the beginning of the year the government lost or wrote off an astounding $1.6 billion invested in GM, according to Treasury figures obtained in the course of JW’s investigation. This includes a shocking $477 million during a small period between May 6 and the end of June, the records show.
As of the end of June, the government still has a 14% stake in GM and a 74% stake in Ally Financial (formerly GMAC), representing remaining investments of $17.2 billion and $14.6 billion, respectively. In all, the government has lost a perplexing $9.2 billion on its investment in GM, the Treasury records obtained by JW reveal.
In order to break even on its investment in GM the government would need to sell its remaining 189 million shares of the auto manufacturer for $95.51 a share. Currently, the stock is trading at a mere $37. That means that, barring an unforeseen spike in share values between now and the remaining scheduled sales, the government will lose another $11 billion from its GM investments.
While all this is going on, President Obama takes credit for saving the American auto industry, touting the success of the government’s bailout of GM. For its part, GM insists it is clear from all government loans. In fact, GM held a celebration at a Kansas City factory in 2010 to announce it had paid back $8.1 billion in government loans. “As of today, GM has repaid in full and interest,” the company’s CEO, Ed Whitacre, told the crowd.
While that may actually be true, American taxpayers keep losing astonishing sums of money in the seemingly never-ending GM bailout. The cash has flowed mostly through the Troubled Asset Relief Program (TARP), which was created to help stabilize the nation’s financial system during the 2008 crisis by purchasing “toxic assets.”