Obama administration expects enough profits from GM, Chrysler to unwind stake

The U.S. government expects General Motors and Chrysler to generate enough profits for it to unwind its equity stakes in both companies, according to a new federal report by the General Accounting Office. However, if both companies unexpectedly fail, the government said that it will consider all options for shedding its stake, including liquidation.

The study done by GAO of the pension funds at GM and Chrysler, said that the U.S. Treasury needs to set clearer standards for measuring its investments in the auto industry to avoid conflicts of interest.

President Barack Obama has repeatedly said that he wants to sell the 60.1 percent stake and the 9.9 percent stake in Chrysler as soon as possible. The U.S. government has dumped $81 billion into rescuing GM, Chrysler, GMAC and suppliers.

– By: Omar Rana

Source: Free Press