The U.S. Treasury’s bailout fund lost $11.2 billion on the rescue of General Motors Co. with the government’s exit of the largest U.S. automaker, a report said.
The total includes $826 million that the Treasury wrote off in March for its remaining claim in old GM, the special inspector general for the Troubled Asset Relief Program said in a report to Congress yesterday. In December, the government had put the loss at about $10.5 billion on its $49.5 billion investment.
The Treasury sold its remaining shares in GM in December, signaling the end of Government Motors, as the Detroit-based automaker was derisively labeled by some critics after the U.S. government stepped in with emergency funding in 2008. Bailouts from the George W. Bush and Barack Obama administrations helped GM avoid liquidation and reorganize in a 2009 bankruptcy that has given new life to the company.
“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Adam Hodge, a Treasury spokesman, said in an e-mail yesterday.
Buoyed by lower debt, reduced labor costs and a focus on only its strongest brands, GM is emblematic of a revitalized U.S. auto industry. While the government lost money, its exit paved the way for an influx of fresh investor capital.
Warren Buffett’s Berkshire Hathaway Inc. and State Street Corp. were among investors to buy into GM. J. Kyle Bass’s Hayman Capital Management LP also took a stake in GM.
GM shares rose 42 percent in 2013. However, the stock had fallen 16 percent this year through yesterday as the automaker struggles with reputational issues following its slowness to recall 2.59 million cars with potentially faulty ignition switches linked to at least 13 deaths.
After reporting first-quarter earnings last week that were better than analysts had expected, GM told investors to temper their expectations for the rest of the year.