The "Government Motors" crowd isn't going to be happy about this: The Detroit News is reporting that the U.S. Treasury now says it has lost an extra $170 million in the auto industry bailout. The culprit? The declining price of General Motors stock.
According to the report, GM's stock crested at $37.23, but is down 35 percent from that level today. The Treasury Department based its calculations on a $21.29 value from November 30, 2011. The government's share of GM was initially 61 percent, but has been reduced to 26.5 percent. The News says that the lower stock price has kept the government from selling its remaining 500 million shares.
While political opponents of the Obama administration will no doubt jump all over this report, the final cost of the bailout is still looking like it will be far less than originally thought. According to the report, the $44 billion estimate was reduced to $30 billion in December 2009, and this most recent estimate puts the total sum at $23.77 billion.
Matthew Anderson, a Treasury spokesman, was quoted as saying: "The auto industry rescue helped save one million jobs and is still projected to cost dramatically less than many had expected during the crisis."