U.S. government says it lost $11.2 billion on GM bailout

WASHINGTON (Reuters) – The U.S. authorities shed $11.2 billion on its bailout of Common Motors Co GM.N, much more than the $10.3 billion the Treasury Section estimated when it marketed its remaining GM shares in December, according to a governing administration report launched on Wednesday.

The $11.2 billion reduction includes a publish-off in March of the government’s remaining $826 million financial commitment in “old” GM, the quarterly report by a Treasury watchdog stated.

The U.S. governing administration put in about $50 billion to bail out GM. As a consequence of the company’s 2009 bankruptcy, the government’s financial investment was converted to a 61 % equity stake in the Detroit-dependent automaker, in addition desired shares and a personal loan.

Treasury whittled down its GM stake through a series of inventory product sales starting in November 2010, with the remaining shares offered on December 9, 2013.

At the time of the December sale, Treasury set the complete loss at $10.3 billion but stated it did not count on any sizeable proceeds from its remaining $826 million expenditure in “old” GM, the report by the Office of the Distinctive Inspector Normal for the Troubled Asset Reduction Application explained.

“The purpose of Treasury’s expenditure in GM was under no circumstances to make a earnings, but to support conserve the American automobile industry, and by any evaluate that energy was thriving,” Treasury Office spokesman Adam Hodge mentioned.

The U.S. bailout of GM and Chrysler, which been given about $12.5 billion, saved 1.5 million jobs in the United States, according to the Center for Automotive Exploration.

Final week, GM posted its 17th consecutive financially rewarding quarter. Earnings, even so, have been hurt by a $1.3 billion cost for the charges of several recollects, together with for faulty ignition switches on 2.6 million cars.

GM is below investigation by the Justice Office, U.S. vehicle safety regulators and Congress around its failure to detect the defective ignition change for around a ten years. The U.S. Securities and Trade Commission is also investigating GM.