Treasury: U.S. to lose $9.7B on GM bailout

The United States Treasury department now expects to lose about $9.7 billion on its $49.5 billion bailout of General Motors.

The government has been slowly selling off the 912 million GM shares, or 60.8 percent of the company, it received for the 2009 bailout, but at current stock prices U.S. taxpayers stand to lose $9.7 billion on the deal. The Treasury currently holds 101 million GM shares, or roughly 7.3 percent of the company, which would net $3.6 billion at today’s stock prices.

In order to break even on the bailout, the Treasury would need GM’s stock prices to rise from its current $36 to $140.

Although a significant hit, most government officials and auto analysts view the GM bailout as a success.

“General Motors is rapidly becoming the company that everyone hoped when the government rescued the auto industry,” a GM spokeswoman said in a statement to Automotive News, adding that GM is “producing cars that win in the marketplace under sound, smart management.”

The government has vowed to sell off its remain stake in GM no later than March.

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