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Latest News - April 2014

April 30, 2014
Report: GM Bailout Cost Taxpayers More Than Previously Reported
Source: Money News
By: John Morgan

The U.S. government suffered a steeper loss than originally reported on the American taxpayers' General Motors bailout, according to a Treasury Department report cited by the Detroit Free Press.

Taxpayers actually lost $11.2 billion, up from the $10.3 billion the Treasury Department estimated when it unloaded its last GM shares last December, the newspaper said – close to $1 billion more than previously acknowledged.

Much of the extra loss came in the form an "administrative claim" tied to the GM bailout, and surfaced in a report of the Office of the Special Inspector General for the Troubled Asset Relief Program.


The U.S. government distributed $50.2 billion in emergency aid to GM in late 2008 and early 2009 to help the company limp through the economic crisis and survive Chapter 11 bankruptcy in 2009.

GM announced it will nominate a United Auto Workers (UAW) official for the company board of directors at the annual meeting on June 10.

If elected, Joe Ashton, a UAW vice president, would become the first union representative to have ever served on GM's board, The Washington Post reported.

The move is highly unusual and almost unheard of at American companies, The Post noted.

"If board members are representatives of a union, the concern is that they could have a conflict of interest between what is best for employees and what is best for shareholders," the Post reported. "How will they vote if management believes a plant closure or round of layoffs is essential for long-term shareholder value?"

Last week, GM reported its net income in the first quarter of 2014 fell more than 80 percent, mostly because of costs associated with the recalls of millions of vehicles over faulty ignition switches.

The auto giant disclosed it is being investigated by both the Justice Department and the Securities and Exchange Commission for its handling of the faulty switches, which have been blamed for a number of accidental deaths, The New York Times reported.

 

 


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