WASHINGTON (AP) -- Taxpayers are unlikely to recover their full investment in General Motors or Chrysler, government investigators said Monday in the latest review to cast doubts that the government will recoup the $80 billion it poured into the two automakers.
The Government Accountability Office concluded that General Motors Co. and Chrysler Group LLC likely won't be valuable enough for the Treasury Department to break even on its investment in the two auto companies that went though bankruptcy earlier this year.
The GAO also revealed that the Obama administration is closely scrutinizing the finances of GM and Chrysler and has set some requirements on production even though it has said it will maintain a hands-off approach on the automakers' daily operations.
To recover the loans Treasury gave Chrysler and GM to keep them afloat, the automakers would have to reach valuations they didn't approach even when they were healthier.
Treasury officials said they were considering a series of initial public offerings to dispose of the government's 61 percent stake in GM. For Chrysler, a private sale of the government's nearly 10 percent stake is more likely because of the government's minority ownership.
GM spokesman Greg Martin said "if we get our job done, the government has an excellent chance of getting a return on its investment." Chrysler declined to comment.
In September, the Congressional Oversight Panel reviewing the $700 billion Troubled Asset Relief Program said most of the $23 billion initially provided to General Motors and Chrysler late last year was unlikely to be repaid. GAO did not provide an estimate of how much might be returned to taxpayers.
GAO said it was concerned Treasury "may not have sufficient expertise to actively oversee and protect the government's ownership interests, including determining when and how to divest these interests."
Copyright 2009 by The Associated Press. All Rights Reserved.
