Washington -The Treasury Department says in a new report the
government expects to lose more than $25 billion on the $85 billion auto
bailout. That's 15 percent higher than its previous forecast.
monthly report sent to Congress on Friday, the Obama administration
boosted its forecast of expected losses by more than $3.3 billion to
almost $25.1 billion, up from $21.7 billion in the last quarterly
The report may still underestimate the losses. The report
covers predicted losses through May 31, when GM's stock price was $22.20
On Monday, GM stock was trading down 6 cents, or 0.2
percent, to $20.49. At that price, the government would lose another
$850 million on its GM bailout.
The government still holds 500
million shares of GM stock and needs to sell them for about $53 each to
recover its entire $49.5 billion bailout.
Treasury spokesman Matt Anderson said the costs were still far less than some predicted.
auto industry rescue helped save more than one 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," Anderson said.
Obama administration initially estimated it would lose $44 billion on
the bailout but reduced the forecast to $30 billion in December 2009.
presidential candidate Mitt Romney has decried the losses on the auto
bailout and insisted that forcing GM and Chrysler Group LLC to go
through bankruptcy first would have saved taxpayers money.
President George W. Bush — who gave the automakers and their finance
arms about $25 billion in his final weeks in office in bailout funds —
said there wasn't time.
Taxpayers incurred a $1.3 billion loss on the $12.5 billion bailout of Chrysler.
Treasury also has put on hold an initial public offering initially
planned for last year in Ally Financial Inc. because of market weakness.
The government holds a 74 percent majority stake in the Detroit auto
finance company as part of its $17.2 billion bailout and has recovered
GM CEO Dan Akerson told employees at a town hall
meeting Thursday that the company was working to take actions to boost
the automaker's sagging price.