With General Motors’ stock rising by as much as 60% since last summer, the long-term cost of the 2009 auto industry bailout has shrunk substantially – but would still top $20 billion at the current GM share price, according to the latest report on the rescue by the U.S. Dept. of the Treasury.
The government began propping up both General Motors and Chrysler – and their finance subsidiaries – in late 2008, under the outgoing Bush Administration, as it became increasingly likely the two makers would plunge into bankruptcy. The rescue effort was ramped up after the Obama Administration came into power, ultimately raising the investment to $85 billion.
Initially, the Treasury warned that it might lose as much as $44 billion as GM and Chrysler filed for Chapter 11. The price tag has since risen and fallen repeatedly, largely based on the stock price of the remaining government holdings in General Motors.