DETROIT (AP) — The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.
The Treasury Department sold its final shares of the Detroit auto giant on Monday, recovering $39 billion of the $49.5 billion it spent to save the dying automaker at the height of the financial crisis five years ago.
Without the bailout, the country would have lost more than 1 million jobs, and the economy could have slipped from a recession into a depression, Treasury Secretary Jacob Lew said.
Now, the American auto industry is back, President Barack Obama said in a statement. “Some of the most high-tech, fuel-efficient cars in the world are once again designed, engineered and built right here in America — and the rest of the world is buying more of them than ever before,” he said.
The government received 912 million GM shares, or a 60.8 percent stake, in exchange for the bailout in 2008 and 2009. It began selling shares once GM went public again in November of 2010, and the pace picked up this year as the stock rose more than 40 percent. Because of the bailout, GM had been tagged with the derisive nickname “Government Motors.”
“We will always be grateful for the second chance extended to us, and we are doing our best to make the most of it,” GM Chairman and CEO Dan Akerson said in a statement.
GM went through bankruptcy protection in 2009 and was cleansed of most of its huge debt, while stockholders lost their investments. Since leaving bankruptcy, GM has been profitable for 15 straight quarters, racking up almost $20 billion in net income on strong new products and rising sales in North America and China.
The auto bailout was part of the Troubled Asset Relief Program, with the bulk of the money going to financial institutions. Treasury said it spent $421.8 billion on bailouts and so far has recovered $432.7 billion, including the loss on GM.