Watchdog: Unlikely That Taxpayers Will Recover $81 Billion Given to GM & Chrysler
EmailABC's Matt Jaffe reports from Washington: On the same day that Ford – the one member of Detroit’s Big Three that did not receive a taxpayer bailout – reported a quarterly profit of nearly $1 billion, a government watchdog warned that taxpayers are unlikely to recoup all of the $81 billion the Treasury Department has invested in General Motors and Chrysler. In a new report released Monday afternoon, the Government Accountability Office stated, “Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially above what they have been in the past.” Since December 2008, Treasury has invested $81.1 billion in the two automakers, more than 12 percent of the total funds available from the $700 billion Troubled Asset Relief Program. The government now has a 60 percent equity stake in the new GM and a 9.85 percent stake in the new Chrysler. At the present time, the GAO noted, “The companies still struggle to remain competitive with other automakers and to regain market share.” But the GAO also said that Treasury’s investments in the two automakers have “contributed to the stability of Chrysler and GM”. Treasury officials told the watchdog that they will consider all options for selling the government’s ownership stakes in the two automakers, but officials did say that the most likely plan to dispose of the GM stake is through a series of public offerings, while the most likely option for the Chrysler stake is a private sale. The timeframe for the government to give up its stake in the automakers remains unclear. In the past, Treasury officials have said that a public offering for GM could occur sometime in 2010, but two independent experts told the GAO that GM might not be ready for a successful IPO by 2010 because the company may not have demonstrated sufficient progress to generate investor interest by then. In a letter to the GAO in response to the report, Duane Morse of Treasury’s Office of Financial Stability said that Treasury “will continue to monitor and evaluate the performance of Chrysler and GM with an eye toward determining the appropriate method and timing for divesting Treasury’s interests in the auto companies.”
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Why would the taxpayers not get their money back? If GM stays in business then they can pay back the loans over time with intrest, if they go out of business then we like any other loan agent should go after all their property and sell it off and recover what we can. Also if they are having problems paying their debt any raises or fancy perks are out of the question for the leaders of these companies. We as taxpayers will not allow the leaders of this government just to throw our hard earned money away, if the congress does not pursue re-payment then we may have to re-think their own job security and place pepole that will do our bidding in their seats of office.
Posted by: tealtripod55 | November 2, 2009, 3:09 pm 3:09 pm
no way
Posted by: Huh | November 2, 2009, 3:12 pm 3:12 pm
I’m not surprised to hear this.
Will we get anything back?
I agree that if they do manage to stay in business over a period of time, they can begin to pay us back at that time.
Who’s keeping the books? An audit is called for each and every quarter.
As a taxpayer and “part owner”, I demand audits!
Posted by: ddg | November 2, 2009, 3:16 pm 3:16 pm
I never thought we would get it back…I also thought we never should have gave it in the first place…
Posted by: dk | November 2, 2009, 3:45 pm 3:45 pm
Come people. Did you not know this was going to happen?? Lots of people and professionals warned us about this but you where all sold a bill of goods. They should have been left alone and let the cards fall. Just like health care. The bill of goods is being sold to you all and you beleive the costs is next to nothing. what about after 10 years?? what is the cost then?? No one knows but it aint cheap. For you dems aint means -is not.
Posted by: Jim Rod | November 2, 2009, 3:45 pm 3:45 pm
As majority of public expected from the beginning.
We are not so dumb as our government expects.
Posted by: Paperwhite | November 2, 2009, 3:48 pm 3:48 pm
Every tax paying citizen should AT LEAST recieve a brand new car that they have been overcharging us for for years.
Posted by: Beth | November 2, 2009, 3:55 pm 3:55 pm
Who’s keeping the books? An audit is called for each and every quarter.
As a taxpayer and “part owner”, I demand audits!
ddg | Nov 2, 2009 3:16:58 PM
Is this sarcasm, or are you really ignorant of the work of the GAO and SIGTARP? Your demand for audits would be a hair more compelling if you bothered to, you know, read the audits behind headlines such as this.
Posted by: jhw539 | November 2, 2009, 4:02 pm 4:02 pm
There is no excuse that they would not be expected to repay this debt to the American people, no matter how long it takes! Its called a Liability and carried on their Balance Sheet!!!
They should have been allowed to go bankrupt. I will never buy a car from Goverment Motors or Chrysler again.
Posted by: HH | November 2, 2009, 4:05 pm 4:05 pm
You know why people were mad about this
whole bailout mentality? Anyone with
half of a brain knew the likelihood
of getting any of the money back was
merely a dream. There is nothing new
in this revelation. Just wait until the
rest of this stuff hits the fan. We
ain’t seen nothing yet.
Posted by: wis134 | November 2, 2009, 4:08 pm 4:08 pm
We should have let them go bankrupt in the 1st palce and kept the money. The money did not stop them from going under so it was just a waste.
Posted by: 'Un-American' | November 2, 2009, 4:12 pm 4:12 pm
What makes you people THINK the Federal government is “American”?
Posted by: August | November 2, 2009, 4:16 pm 4:16 pm
We have been robbed and its all legit. So far I don’t see much difference between Bush and Obama. It seems regardless of party they have the same puppet masters. What the heck is going on in Washington? I say lets drag those politicians out and bring back the guillotine. Now thats reality TV i’d watch.
Posted by: NewAmericanow | November 2, 2009, 4:24 pm 4:24 pm
Are we supposed to act surprised about this? okay here I go…. *GASP*!!!!!
Posted by: pir808 | November 2, 2009, 4:30 pm 4:30 pm
Imagine how much worse this could have gotten without all of this government intervention? But it is coming at an unbelievable cost, one that will be paid for for years to come!
Posted by: Marc | November 2, 2009, 4:43 pm 4:43 pm
I’d like a loan that I didn’t have to pay back!…..
Posted by: NM | November 2, 2009, 4:48 pm 4:48 pm
So we get nothing for our money, but Obama and his crooked administration got votes and money donated to them via unions. Gee thanks politicans…NOT. Why aren’t these crooks in jail.
Posted by: VeryPainfulTruth | November 2, 2009, 4:50 pm 4:50 pm
No surprises in this article. Glad I bought Ford stock when it was 2.10 a share :)
Posted by: Alex | November 2, 2009, 4:54 pm 4:54 pm
And this comes as a shock to who?
Never again will I buy GM (Government Motors).
Posted by: CC | November 2, 2009, 5:08 pm 5:08 pm
the UAW manipulated obama into bailing them out and giving them ownership of GM. now, to ensure their support, democrats will have to keep the company in it’s zombified, undead state on life support. get used to it folks. the UAW is now a permanent charity case for the government…another “entitlement” spending pig slopping at the public trough. “saving” GM was never about saving the company; rather, it was about saving the jobs of UAW workers. now, every paycheck cut to UAW workers is a glorified welfare check.
Posted by: davidfrat21 | November 2, 2009, 5:09 pm 5:09 pm
Welfare for the rich. Or like Bush put it (and apparently Obama too) his “base.” The rich get taxpayer money, the poor get to pitch a tent in a public park. Whole families in tent cities IN AMERICA thanks to Fannie, Freddie Mac run by Barney Frank’s lover, and BUSH gets the blame. Only with the “fawning corporate media” to cover it all up. Do the people in the tent cites get a stimulus check Barack? Just how DO they get their pittance handout when THEY DON’T HAVE A HOME!!! You should be just as ashamed as Bush and the masters who “selected” you to be their man in the White House. NOW we know how you got all that money. It was to cover up the damage and let the criminals who created this mess get out of town while the TAXPAYERS are left holding the bag, and are on the hook for even MORE tax and spending. We tried the Welfare/Warfare state in the 60′s and that brought us the ’70′s. How much more spending do we have to do before we spike into a financial “China Syndrome?” Gee Barack, THIS is progress? No, this is a JOKE! Good luck in the midterms. Oh right Diebold, well I guess the taxpayers just have to “give some more skin” that right Barack? Three more years to 2012!!!
Posted by: jafo | November 2, 2009, 5:12 pm 5:12 pm
Is anyone shocked by this? Obama, Pelosi, Reid, Frank and the rest of the Democrats took money designed to keep the financial industry afloat and take care of the UAW and their health & pension plans. With the TARP money we are actually making money on what was given to the financial institutions. But for the money that went to the UAW and to the homeowners who bought above their means…well that money is a dollar lent and a dollar gone. We don’t even get CHANGE.
2010 we start to vote them out and 2012 we vote the rest out. Democrat states will be blue no more. Not that I trust Republicans but at least I know the Republican agenda isn’t to become a nanny state.
Posted by: ResponsibleAmerican | November 2, 2009, 5:14 pm 5:14 pm
Really? I’m shocked…
Posted by: Ken | November 2, 2009, 5:18 pm 5:18 pm
This is really upsetting, depressing, and just infuriating if you’ve watched Who Killed The Electric Car.
Posted by: keredte | November 2, 2009, 5:23 pm 5:23 pm
What’s worse is that GM took our money and used it to complete their factories in India and China while laying off Americans and shutting down factories in the US.—Regards, The Old Prospector—
Posted by: Prospector44 | November 2, 2009, 5:25 pm 5:25 pm
We are not going to get our taxpayer ‘investment’ back from GM and Chrysler for several reasons: (1) It was a union payoff, nothing more. It contributed zero to GM or Chrysler competitiveness, (2) The Car Czar knew zero about cars, the car industry, or running a business, (3) NO ONE who has money to buy a car, will buy an Obama goverment built car, on principle. If they buy American, at all, they will buy a Ford, because it was built the American way, by an American Company. Unions killed those car companies. The bailouts did nothing but protect unions and democrat votes. For just a little while.
Posted by: andrew nelson | November 2, 2009, 5:26 pm 5:26 pm
I don’t think we lent the money to them. Didn’t we buy stock? The reason we’ll never see our money is because the stock price will never be high enough to be worth the 81Bil we paid for it…
Posted by: SanteeMike | November 2, 2009, 5:40 pm 5:40 pm
The debt should never be forgiven and we should require that it’s paid back if it takes 20 years …….. and even of it takes every cent of the UAW’s retirement funds. If Ford can make it work, so can GM and Chrysler. If we have to bleed the company dry, so be it. This was not a donation. No debt forgiveness ever. If we don’t draw the line here, everyone will jump on the band wagon.
Posted by: Willie12345 | November 2, 2009, 5:51 pm 5:51 pm
Boycott them.
Posted by: anybody | November 2, 2009, 6:05 pm 6:05 pm
This is supposed to be news? I could have told anyone that when the bailout was being debated … in fact I told anyone that would listen (obviously my congressmen did not).
Posted by: Lewis Balentine | November 2, 2009, 6:29 pm 6:29 pm
One of the posts said that Bush and Obamha are the same, your very right they are the same they are the government they and all the rest are not to be trusted it is time that we americans take this country back but be for warned the only way that will ever happen is by force a full revolution is the only way this will ever happen. This country is no diffrent that russia, china, or any of the other great nations. the working class is to be pasafied and nothing else we are slaves to the empire and revelution is your only recourse. GOOD LUCK with that they will kill us all and bring in more wet backs with cheap forgein labor natural born americans are expendable.
Posted by: tealtripod55 | November 2, 2009, 6:33 pm 6:33 pm
Only a complete fool would have supposed for an instant that this bailout would succeed. It was clearly designed to cater to the unions.
Posted by: EGHolder | November 2, 2009, 6:40 pm 6:40 pm
My E-bay business is going alittle sour. Could I have Billion bucks? Please?
Posted by: darkfall | November 2, 2009, 6:43 pm 6:43 pm
As part owner, I will authorize GM and Chrysler to extend the terms of their payment schedule over a longer time but bankrupsy is not allowed. Based on that, the interest payments will insure a good return on the taxpayer funded program. If they default, then the taxpayers will sell them and all their assets to the chineese so they can make inexpensive cars for Americans under the name GM and Chrysler. That should drop the trade defecit a bit.
Posted by: Wayne | November 2, 2009, 6:43 pm 6:43 pm
Change you can believe in, yeah righ :)
Posted by: Dave | November 2, 2009, 6:48 pm 6:48 pm
So, let me get this straight – the government diverts dollars from TARP without congressional approval, teams up with the trade unions to stiff the bondholders and pays for everything using money borrowed from the Chinese… And we’re surprised that GM and Chrysler aren’t thriving?
Posted by: jche | November 2, 2009, 7:01 pm 7:01 pm
How crooked is thy government?
Posted by: Jon | November 2, 2009, 7:05 pm 7:05 pm
“Watchdog: Unlikely That Taxpayers Will Recover $81 Billion Given to GM & Chrysler”
Well, duh.
Tomorrow’s headline: “Water is Wet.”
So how’s that Hope and Change working for you?
Posted by: Jenn | November 2, 2009, 7:06 pm 7:06 pm
Huh? The government finds a way to catch up with student loan defaulters but they can’t find all of the TARP money it gave to GM and Chrysler?
Can I have my student loan debt added to this unlikely to recover money pool? Also, I agree that I am PROUD to be American. We obviously are not as dumb as Congress apparently thinks we are. We need a billboard that says, “We told you.”
Posted by: lovebugs | November 2, 2009, 7:42 pm 7:42 pm
How can GM say they struggle to stay competitive? They did not learn that they had out priced themself, now they say they are affordable…$55K for a Tahoe? How many working class people can really afford a vehicle over $50K in todays economy? Who in this bailout did not think of how to cut costs, overhead to make vehicles affordable again?
And our Goverment really thinks that we all thought the loans would be repaid and tax payers would get a break…LOL
Maybe we should have cuts in the Politicians Paychecks.The Rich get Richer in Goverment by letting the IRS rob us blind…Legal Theft.
Posted by: Find your way back | November 2, 2009, 7:49 pm 7:49 pm
Why should the taxpayers care if the money loaned to the auto makers is recouped? Certainly, the money loaned to the banks has only resulted in creating more middle class victims, while the banks continue rake in enormous profits and give ever larger bonuses. At least the auto makers employed middle class Americans. If the lawmakers in this country were content to send millions of jobs to India and China, while destroying middle class America, then it only seems just that companies that employed middle class Americans were the recipients of loans that may or may not be paid. Loaning the automakers money is pretty piddly compared to what the American government has done in handing the entire manufacturing, customer service, and IT industry to China and India.
Posted by: laurel181 | November 2, 2009, 8:18 pm 8:18 pm
I would like to get an $81B loan that I don’t have to pay. Hell, I can even register a corp and sell the government preferred shares for it. Or, like Goldman as a minimum I would like $10 bln at 10%. Oh, wait, they then lowered it to 5%. And I will actually repay the government at 5%. I could easily make 20% on that much and return the measly 5% like Goldman did. Hell, I would not mind borrowing $10 bln at 10%. After the bank cut our business line of credit limit by 50% without reason and another bank jacked up the rate from 8 to 13% for no apparent reason and the third bank jacked up the rate by 2% for no other reason than being Wells Fargo… I can go on…
Posted by: lou | November 2, 2009, 8:35 pm 8:35 pm
I suggest the people who voted for Obama pay the cost back to the taxpayers of the USA. Obama and the people who voted for him will destroy the USA.
Posted by: Phil Tweedy | November 2, 2009, 8:36 pm 8:36 pm
Gee – thanks Bush!
Posted by: zazzle | November 2, 2009, 8:38 pm 8:38 pm
We are being set up. The government can afford to wait. GM can pay as they go and work out total payment. An auction will be no more than a Wall Street sweetheart deal for someone to buy at a huge discount. GM needs to repay and Treasury needs to collect.
Posted by: Jim | November 2, 2009, 8:39 pm 8:39 pm
How much do we as Americans owe the unions? Go figure this – Ford does NOT take any money, is now turning a profit, and as a result is being challenged by the unions for MORE money,
so they can work on breaking Ford.
We should all be sick, to think that this has happened, and to boot we all get railroaded into the new socialist Utopia.
GM should be sold off to the highest bidder for whatever we can get. At least it will be some recovery. GM is not worth saving, or are the fools that work there. Unions worked in the early 1900′s, not now or ever again.
Vote the bums out in 2010
Posted by: MFW | November 2, 2009, 8:55 pm 8:55 pm
For the last 50 years the big three automakers and their autoworkers paid huge amounts in taxes to the Federal Governmentb far exceeding the bailout. Foreign automakers have been allowed under free trade to import vehicles almost tax free, giving them a significant competitive advantage, most people just don’t understand that our tax policies have made a significant contribution to manufacturing fleeing this country.
Posted by: john kesrouan | November 2, 2009, 9:01 pm 9:01 pm
“How much do we as Americans owe the unions? Go figure this – Ford does NOT take any money, is now turning a profit, and as a result is being challenged by the unions for MORE money,
so they can work on breaking Ford.”……. Not true. They have given up a lot. They are holding out for the upper CEO’s to take a bigger hit and things like that. Tell me, if YOU worked for a company (and they work hard I might add) and they pulled down a billion profit after you gave up salary and bennies, would you want to give up even more? I sure would not.
Posted by: secondlook | November 2, 2009, 9:02 pm 9:02 pm
Secondlook -
We should all be insulted by this remark – They work hard – big deal, we are all working harder than ever, for those who can work. Get the big picture! Union payback for votes. Now if you divide 81Billion by the good ole union boys, How much a vote was that?
Oh I forgot – Making a profit is not in vogue now, it smacks of the bush devils and thier plot against us. Well look around Like what you see?
Posted by: MFW | November 2, 2009, 9:15 pm 9:15 pm
Oh gee… I am just sooo shocked at this news! I mean, like, Wow even! It’s not like many didn’t warn the Democrats they were p*ssing away money – that the tax payers would never get this back – so why the surprise that the tax payers won’t see this money again?
Obummer, Pelosi, Reid, Frank, etc were just paying back the Sheeple… Uh… I mean Unions for voting for them. Eventually these Union jobs will be gone – just as Obummer is shutting down the coal mines in Virginia and West Virginia – and putting all those Union members out of work as well. His promises only go short term for what they can do for him… You can see what his promises did for his Democrat Gov in Virginia – O-U-T!
Posted by: clr | November 2, 2009, 9:21 pm 9:21 pm
Why isn’t the UAW going to lose their share in the GM? The tax payers get the shaft, while the Union get their pay raises, performance bonus and Gov’t health insurance at our expense. Wake up people time to vote out these corrupt individuals in Congress an demand an impeachment of Pelosi (who demanded that Bush bail out GM, but he refused and Obama bailed them out instead) Reid, Dodd, Emanuel & Obama.
Posted by: rukidding 55 | November 2, 2009, 9:33 pm 9:33 pm
GM could recover enough to either earn enough for repayment or sell excess real estate. It is workable.
With Chrysler we could always do the Biblical thing and give Chrysler to Ford, assuming they would accept it.
Posted by: neuromni | November 2, 2009, 9:47 pm 9:47 pm
Are they trying to tell us that giving multi-million dollar bonuses to top executives didn’t fix the economy? I really thought paying people to buy foreign cars would have done it. Surely the $400 million spent on another global warming study did something!
Posted by: oonogil | November 2, 2009, 9:55 pm 9:55 pm
Tealtripod55,
You said, “We as taxpayers will not allow the leaders of this government just to throw our hard earned money away, if the congress does not pursue re-payment then we may have to re-think their own job security and place pepole that will do our bidding in their seats of office.”
I agree 100%. However, they’ve already thrown away billions of our tax dollars. We’d better get started on getting them out of there before the U.S., as we know and love it, quickly becomes a Socialist Regime. Look at the health care bill, that is completely incomprehensible to those who try to read it (why even bother posting it online – no one can undertand what it is really says other then the legislaters who wrote it?), being rammed through by our president.
Beware…. if the federal government is allowed (supposedly within the commerce laws of the Constitution) to force individual citizens of the U.S. to buy health insurance…..then the federal govenment will be allowed to make us do and/or buy whatever else they want us to.
Beware of the health bill – it is setting a dangerous precedent…..
Posted by: Beth | November 2, 2009, 10:01 pm 10:01 pm
There is no US citizen with any common sense who thought that the government will recover anything from the bail out or the buy out or the stimulus but who listens to citizens with common sense. It is business as usual.
Posted by: gjkotw01 | November 2, 2009, 10:09 pm 10:09 pm
It was fitting that the GM chief, Rick Wagoner was asked to resign back in March. (Wagoner took the wheel at GM back in 2000 and since then the stock price had dropped from $70 a share to just $4.)
Ford shows that profit is alive! Build a better automobile and the world will beat a path to your sales lot.
Posted by: rakko | November 2, 2009, 10:46 pm 10:46 pm
But the future of NASA can’t get a mere 3B more a year… Sad!
Posted by: easymoney | November 3, 2009, 12:55 am 12:55 am
It’s all about greed and the American way. Try being a small business owner that needs a helping hand or owes tax money and one would quickly discover the lack of compassion our government has for the little guy. Nobody is their for the working class, it was all about protecting Wall Street, big corporations and bankers at the expense of the American taxpayer on Main Street. I’m not surprised, money goes to money.
Posted by: John | November 3, 2009, 1:02 am 1:02 am
In a new report released Monday afternoon, the Government Accountability Office stated, “Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially above what they have been in the past.”
Just one more example of Odumbo’s stupidity.
Posted by: Liberwhacker | November 3, 2009, 2:23 am 2:23 am
Posted by: pir808 | Nov 2, 2009 4:30:37 PM
Imagine how much worse this could have gotten without all of this government intervention? But it is coming at an unbelievable cost, one that will be paid for for years to come!
Without the liberals stupid intervention into our free market system, the situation would not have been worse, it would have healed on its own and much faster.
Posted by: Liberwhacker | November 3, 2009, 2:27 am 2:27 am
Every tax paying citizen should AT LEAST recieve a brand new car that they have been overcharging us for for years.
Posted by: Beth | Nov 2, 2009 3:55:45 PM
Let me guess????? Beth is one of those black women shown on video clips stating that Odumbo was going to pay their mortgage and fill their car with gas.
Posted by: Liberwhacker | November 3, 2009, 2:40 am 2:40 am
Can I have my student loan debt added to this unlikely to recover money pool? Also, I agree that I am PROUD to be American. We obviously are not as dumb as Congress apparently thinks we are. We need a billboard that says, “We told you.”
Posted by: lovebugs | Nov 2, 2009 7:42:37 PM
Lovebugs states that “we are obviously not as dumb as Congress apparently thinks we are”. Oh yeah? The American public, at least the liberal democratic part of it, elected Odumbo and the congressional traitors who are making these stupid decisions.
Posted by: liberwhacker | November 3, 2009, 2:50 am 2:50 am
What’s not included in the calculations is that the federal government will take in over 20% of the income earned in jobs that otherwise would not be here. That extends to those making steel, electronic parts, etc. for Detroit. Additionally, there’s the extra income Michigan and the many other states with auto plants get in taxes on incomes that otherwise would be in another country. My guess is all that more than makes up for $81B.
Posted by: The_Mick | November 3, 2009, 7:41 am 7:41 am
So this comes out to how much per vote? Total paid / Union employee = ?.
Posted by: Ken | November 3, 2009, 11:15 am 11:15 am
Jhw – there you go again – yes, my dear, it was sarcasm!!!!!!!!!
You are indeed a very argumentative fellow. You’ve been called on that before.
Posted by: ddg | November 3, 2009, 1:24 pm 1:24 pm
I think I know which group will NOT be re-elected.
Posted by: matt Wood | November 3, 2009, 2:32 pm 2:32 pm
They never intended to pay it back, just like the bail out money for fannie and freddy and others. Their plan is to suck up as much govt funding as possible, then file bankruptcy and remove the debt. When it comes to politicians, they only care about making the other party look bad and padding their wallets and to hell with the nation. Unions are nothing more than left-overs from the roaring ’20s and have become fat leeches. Americans need to wake up and pay attention, outlaw unions and political parties, cut the pay for political offices serverly so that those elected are there because they want to be, NOT to become rich. The feds gave the money to the wrong people, they should’ve given it to the people, they have wasted enough to give evey man, woman and child a million and it still would’nt have cost half as much!
Posted by: Steve | November 4, 2009, 2:31 am 2:31 am