Taxpayers that invested heavily into motor companies Chrysler and GM will not see the exponential growth they hoped from the government’s auto bailout. The Congressional Oversight Panel announced in a report Wednesday that taxpayers will face a significant loss. According to The Associated Press, the panel did not provide an estimate of the projected loss in its latest monthly report on the $700 billion Troubled Asset Relief Program. They did say however that most of the $23 billion initially provided to General Motors Corp. and Chrysler LLC late last year is unlikely to be repaid.
In order for people to get their money back, shares for the companies would have to increase “sharply.” The report says that GM’s shares would have to reach $67.6 billion which is more than $50 billion more than GM was worth at its peak in April of last year. As for Chrysler, the company is expected to lose $5.4 billion of the $14.3 billion it received from the government. That money will reportedly never be repaid.
Despite the bleak report, GM remains optimistic. A spokesman for the new GM, Greg Martin, said the company is “confident that we will repay our nation’s support because we are a company with less debt, a stronger balance sheet, a winning product portfolio and the right size to match today’s market realities.”
The Congressional Oversight Panel is not the first agency to look further into the auto bailout. The Congressional Budget Office estimated in June that taxpayers would lose a reported $40 billion from the first $55 billion the companies received in aid.
