Tags: US | Chrysler | Repayment

Treasury Takes $2.1 Billion Loss On Chrysler Loan

Monday, 17 May 2010 07:08 PM

 

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The Treasury Department said Monday it will lose $2.1 billion on a loan made to Chrysler in early 2009. Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors say.

Treasury said Monday that it had received a $1.9 billion repayment from Chrysler Holding, which emerged from bankruptcy last year, and that was all it expected to recover.

The original loan was made to Chrysler LLC on Jan. 2, 2009, by the Bush administration. At the time, the government was scrambling to provide emergency support to both Chrysler and GM and their auto financing arms.

The Congressional Budget Office estimated in March that the government's $85 billion bailout of automakers would cost taxpayers $34 billion.

Much of it will depend on how much the government recovers from its eventual sale of nearly 61 percent of GM and about 10 percent of Chrysler.

GM has said it could conduct a public stock offering later this year. Chrysler officials have said a public stock offering is not likely before 2011.

The Treasury Department made the announcement about the loss from Chrysler on a day when GM reported its first quarterly profit in nearly three years. That moved GM closer to a stock offering that would repay at least part of the $43 billion it owes the government.

GM on Monday announced it had made net income of $865 million, or $1.66 a share, in the first quarter. That compared with a loss of $6 billion, or $9.78 a share, a year earlier. Debt and other expenses were cut by its stay in bankruptcy court last year. Strong new-model sales also helped, GM said.

——

Associated Press Writer Ken Thomas contributed to this report.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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