U.S. Government Reports $11.2 Billion Loss From GM Bailout
While the U.S. Treasury Department may have sold its remaining shares of General Motors, it didn't get back nearly as much as it spent when it bailed the company out back in 2009. Instead of losing an estimated $10.3 billion, the Department reported a total loss of $11.2 billion. The bailout cost the U.S. government roughly $50 billion to save GM and 1.5 million American jobs, and while it didn't expect to get all the money back, the loss was much greater than anticipated. This March, the Treasury wrote off the remaining $826 million investment, which contributed to the $11.2 billion loss. "The goal of Treasury's investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful," said Treasury Department spokesman Adam Hodge in a recent interview. Since the bailout, GM has reported its 17th consecutive profitable quarter. But when looking at earnings in the last quarter, those numbers suffered thanks to the $1.3 billion charge for recall costs, including the headlining faulty ignition switch recall that affected over 2.6 million vehicles. Added to that, GM is still under investigation from the Justice Department, U.S. auto safety regulators, Congress, and the U.S. Securities and Exchange Commission. Source: Reuters
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