Exit From Auto Bailout Will be Difficult, And Likely Cost Taxpayers, Says GAO

[Geee]

CNSnews:

(CNSNews.com) – As the Treasury Department seeks to extricate itself from the 2009 auto industry bailouts, it will struggle to balance being both an investor and a government agency, in the view of the Government Accountability Office (GAO).

A GAO report also notes that the Treasury will not likely recoup all of the $62 billion it spent to prevent General Motors and Chrysler from going through the normal bankruptcy process.

“Treasury’s divestment strategy for its GM and Chrysler investments – including the timing of Treasury’s exits and the extent to which it will recoup its investments – will depend on how Treasury balances its goals of maximizing taxpayers’ return and exiting as soon as practicable,” the May 10 report stated.

The government watchdog said the price of GM shares still owned by the Treasury would have to rise dramatically for the government to break even on the bailout – a development the GAO thinks is highly unlikely to happen in the near future.

“GM’s share price will have to grow significantly for Treasury to approach fully recouping its investment in the near term,” it reported. “GM’s share price will have to increase over 60 percent from the IPO [initial Public Offering] share price to an average of over $54 for Treasury to fully recoup its investment in GM.”

[clearvision]

Obama was bragging about how all the US auto makers were making a profit now that he had worked his wonders. GM went bankrupt to get rid of debt, contracts, pensions, etc. and off loaded alot of that to taxpayers. Japanese auto makers are struggling to make cars right now. We are coming out of an extremely slow period and people are starting to catch up on replacing their cars. Be interesting to see where GM and Chrysler are in 1 year.

[Evad]

Yep.

Who made out on this deal?

Unions

Fat Cat Managers

0bama

Who got screwed?

Taxpayers

 

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