A new report by the Congressional Oversight Panel, which oversees federal bailout programs, may end up surprising you. According to the report the government is very unlikely to get back all the billions of dollars that it invested in General Motors and Chrysler. It said that GM’s stock would have to “reach unprecedented heights” for the company to pay back the $50 billion, while the $5.4 billion portion of the $10.5 billion owed by Chrysler is “highly unlikely” to be repaid.
The report asked that the U.S. Treasury Department act with more transparency and provide a legal analysis justifying the use of financial rescue funds for GM and Chrysler. It said that the government has invested $74 billion of taxpayer money in the nation’s auto industry, including $12.5 billion into GMAC and $3.5 billion into auto suppliers.
The panel also said that the government may have avoided economic catastrophe by rescuing the auto industry, which represents about 6.5 percent of manufacturing jobs in the United Sates.
GM released a statement last night saying: “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.”
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– By: Omar Rana
Source: Washington Post (via MSNBC)