Crain News Service report
WASHINGTON (Feb. 12, 2013) — The Treasury Department on Feb. 11 said the overall cost of its 2008 financial-rescue effort was reduced to $55.5 billion from $59.7 billion, as it has recouped a majority of the costs of programs that unlocked tight credit markets.
The latest tally means that about 93 percent of the $418 billion in funds already disbursed to date from the $700 billion Troubled Asset Relief Program (TARP) have been recovered.
TARP is credited with helping revive consumer lending and rescuing auto makers General Motors Co. and Chrysler Group L.L.C. The latest downward revision on TARP's cost was due in part to money it recouped from stock sales of the remaining shares of GM it owned.
In its estimate, the Treasury projects that the auto industry bailout cost was reduced by $4 billion, or 16 percent, to $20.3 billion from a previously projected $24.3 billion.
The Treasury in 2009 initially forecast it would lose $44 billion on its bailout of GM, Chrysler and their finance arms. That forecast fell to $30 billion by year-end 2009 and fell as low as $14.3 billion in 2011.
In December, the Treasury sold 200 million out of its 500 million shares in GM for $5.5 billion. The move reduced its holdings in the company to 19 percent.
The sale price was far below the government's breakeven price and the Treasury now needs to average about $70 a share on its remaining GM shares to break even.
Treasury is unloading its remaining GM stake on the open market and plans to complete the sale of shares in the company by March 2014.
GM shares closed Feb. 11 at $28.53, down 4 cents, in New York Stock Exchange trading.
Reuters and reporter David Phillips contributed to this report, which appeared in Automotive News, a Detroit-based sister publication of Tire Business.