Blame the volatility of the stock market – according to a new report, the falling value of General Motors’ stock will cost the U.S. government an additional $3.3 billion in lost money from the 2009 auto bailout.
That number comes from the latest U.S. Treasury report that states the government will lose roughly $25.05 billion on the auto bailout as of May 31; in April, the Treasury had reported a loss of $21.7 billion. The Detroit Free Press goes on to report that because of GM’s stock tumbling 15 percent in April and May, the government’s losses widened. In 2009, the U.S. loaned General Motors $50 billion to keep the auto giant from filing for bankruptcy and has received more than $24 billion in repayment.
It wouldn’t be the first time the government took a loss on one of the bailout repayments – according to the Freep, it lost $1.3 billion on the loan it extended to Chrysler, which has completely repaid its loans since it was purchased by Italian automaker Fiat. Presently, the U.S. Treasury still holds a 26.5-percent stake in the General Motors – that’s around 500 million shares, which are currently valued (as of close on August 13) at just $20.63 each, well below the roughly $53 per share needed by the government to recoup the full loan.
Source: Detroit Free Press