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U.S. 'Unlikely' to Recoup Auto Outlay, Panel Finds
 The federal government is unlikely to recoup all of the billions of dollars that it has invested in General Motors and Chrysler, according to a new congressional oversight report assessing the automakers' rescue.The report said that a $5.4 billion portion of the $10.5 billion owed by Chrysler is "highly unlikely" to be repaid, while full recovery of the $50 billion sunk into GM would require the company's stock to reach unprecedented heights. "Although taxpayers may recover some portion of their investment in Chrysler and GM, it is unlikely they will recover the entire amount," according to the report, which is scheduled to be released Wednesday. The report also recommended that the Treasury Department act with more transparency and provide a legal analysis justifying the use of financial rescue funds for the automakers. The report was prepared by the Congressional Oversight Panel, which is overseeing the federal bailout programs. In all, the government has invested $74 billion in the nation's auto industry, including $12.5 billion into auto financing giant GMAC and $3.5 billion into auto suppliers, according to the report. The panel said the government may have averted economic catastrophe by taking on the rescue. The automotive industry represents about 6.5 percent of the manufacturing jobs in the United States. "Preserving portions of Chrysler and General Motors might have resulted in savings for the government in other ways," the report said. GM issued a statement Tuesday night saying that it was a stronger company than it was before its bankruptcy filing and government rescue. "We are 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," it said. Posted by: Fred 2009-09-10 |
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