Taxpayers ‘unlikely’ to fully recover auto loans

Posted on Wednesday, September 9th, 2009 at 1:34 PM EDT.

An independent oversight panel urged the Treasury Department to place its equity stakes in General Motors Co. and Chrysler Group LLC in an independent trust, and warned it is “highly unlikely” that taxpayers will recover all of the $8 billion the government has loaned to the auto industry, The Detroit News reported.

The 143-page report from the Congressional Oversight Panel overseeing the $700 billion Troubled Asset Relief Program said the Treasury Department must take steps to ensure more transparency, the paper said. The report, which will now be submitted to Congress, is likely to add ammunition to attempts by some to force a timetable for a speedy government divestment of its equity stakes in the two automakers—and its stake in GMAC, the News said.

The panel, chaired by Harvard Law Professor Elizabeth Warren, said Chrysler is “highly unlikely” to repay $5.4 billion of its $15 billion in government loans and quotes the administration’s top auto adviser, Ron Bloom, as saying the government may recover little of the initial $19.4 billion loaned to GM of the $50 billion it has received, the story said. (The Detroit News)

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