On the same day that Ford -- the one member of Detroit’s Big Three that did not receive a taxpayer bailout -- reported a quarterly profit of nearly $1 billion, a government watchdog warned that taxpayers are unlikely to recoup all of the $81 billion the Treasury Department has invested in General Motors and Chrysler.

In a new report released Monday afternoon, the Government Accountability Office stated, “Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially above what they have been in the past.”

Since December 2008, Treasury has invested $81.1 billion in the two automakers, more than 12 percent of the total funds available from the $700 billion Troubled Asset Relief Program.

The government now has a 60 percent equity stake in the new GM and a 9.85 percent stake in the new Chrysler.

At the present time, the GAO noted, “The companies still struggle to remain competitive with other automakers and to regain market share.”

But the GAO also said that Treasury’s investments in the two automakers have “contributed to the stability of Chrysler and GM”.

Treasury officials told the watchdog that they will consider all options for selling the government’s ownership stakes in the two automakers, but officials did say that the most likely plan to dispose of the GM stake is through a series of public offerings, while the most likely option for the Chrysler stake is a private sale.

The timeframe for the government to give up its stake in the automakers remains unclear.

In the past, Treasury officials have said that a public offering for GM could occur sometime in 2010, but two independent experts told the GAO that GM might not be ready for a successful IPO by 2010 because the company may not have demonstrated sufficient progress to generate investor interest by then.

In a letter to the GAO in response to the report, Duane Morse of Treasury’s Office of Financial Stability said that Treasury “will continue to monitor and evaluate the performance of Chrysler and GM with an eye toward determining the appropriate method and timing for divesting Treasury’s interests in the auto companies.”

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To summarize, our elected leaders take our money and 'loan' it to companies that lose money. The companies that lose money tell our elected officials that they don't much feel like paying the money back. Our elected officials respond by saying that's fine and dandy, it's just those suckers the taxpayers anyway.

I think since we're not getting our money back anyway, every taxpayer ought to boycott GM and Chrysler products. The problem is, that will cause them to lose even more money, and the government will give them more of our money anyway. Meanwhile, there is no incentive for GM or Chrysler to run their business in a responsible and competent manner, and so they likey won't.

I'm actually quite happy for Ford......

And they said the same thing about Chrysler, when Iacocca was Chairman. 'Oh we'll never get anything back'; and yet they paid it back, early, and with interest. And wasn't it "Boner' who admitted he was wrong about Chrysler back then?

And by the way, don't cheer too loud for Ford yet. They still have one foot in the grave and the other on a banana peel. Wow, nearly a whole $1 billion. And they're trying to refinance how many billions right now?

And just incase you forgot, Alan Mulally was sitting right there with Wagoner and Nardelli. Infact Mulally is the one who went back to the UAW for more in concessions, which they voted down; and he is the one who said he was very comfortable with his pay package. Yep, the UAW told him 'we're very comfortable where we are.'

I live in their backyard, I see what's going on.

1. Iacocca obviously isn't chairman anymore. I wouldn't bet on the money being repaid for two reasons: the enormity of the amount involved, and the fact there is little to no pressure from the government to make them do so. Who's looking out for the taxpayer? No one.

2. Although Ford isn't out of the woods yet, it is interesting to note that they are doing better than the two automakers who took the loans. You would think they'd be at a huge disadvantage.

It's possible that every dime of borrowed money will be paid back with interest. It is, however, unlikely, as the ABC piece points out. Taxpayers should be upset about that, since it is their money. Or was, till it was confiscated.......

At the time the government was making these loans, some people here were predicting we'd recoup that investment... based only on the fact we'd recouped a somewhat similar investment in Chrysler, years ago. But I argued we wouldn't, based simply on the debt/equity ratio involved. If you loan a thousand dollars to a company worth $10,000, you've got a good shot at recovering that money, since a reasonable return on that equity should be able to service the debt. But if you loan the same thousand dollars to a company worth $100, you wind up needing an unrealistically good return on equity to cover that debt. We loaned GM and Chrysler more money than the companies were even worth -- which was doubly troubling in light of the fact that much of the market's perception that the companies had ANY worth was simply based on the assumption that taxpayers would keep them from failing.

I'm not sure anything needed to be done to save that industry -- do we really need domestic car companies? It might have made more sense to use the same billions of dollars to pay to retrain auto workers for jobs in industries where the US might have a more enduring relative advantage over international competitors, and to fill shortages we're experiencing (like in nursing). But even if we were going to commit to preserving a strong US auto industry, I'd have preferred to do it in a way that allowed the diseased corporate cultures at Chrysler and GM to die, and to be repalced by an expanded Ford and new companies committed to a new way of doing things. If we're going to be throwing billions of dollars at the problem either way, better to throw it into innovative startups working on better batteries for hybrids and electric vehicles, and little companies like Tesla Motors that have some potential for creating the products of the future. Give them the money to buy up the more valuable Chrysler and GM assets, out of bankruptcy, and start fresh, rather than throwing good money after bad on derelict old companies.

What you need to look at is the ratio of the loan to the value securing it, the same as you would for a mortgage. You would probably gladly loan a hundred thousand bucks on a mansion worth many times that much, but you wouldn't expect to see that money back if you loaned the same amount on some dilapidated four-figure ranch in a slum of Detroit. It's not so different with business loans. Whether you should expect to see your money again is largely dependent on the value of the company you're loaning it to, relative to the amount of money you're loaning.

In the case of GM, we loaned about $58 billion to a company that, as recently as December, was worth about $1.8 billion. That's a lot like loaning someone $580,000 with him offering his $18,000 shack as collateral. Don't hold your breath about seeing that money again. That's where the historical analogies to the 1979 bailout fail. I don't have the exact loan/equity ratios at my fingertips, for that earlier bailout, but we weren't loaning thirty times the value of the company back then, like we were this time.

I'm not saying the government should insist on the same equity standards a private lender would -- the whole point of government loans is that they're for times when the private lenders aren't stepping up and for various broader reasons we think the loan is going to benefit the country, even if our government doesn't recover all the money directly. But let's not deceive ourselves into thinking that the loans we made to GM and Chrysler were good investments in the sense of expecting to see that money back with interest. We handed those companies many, many times as much money as the market thought the entire operations were worth, and we're unlikely to ever get it back.

I'm not sure anything needed to be done to save that industry -- do we really need domestic car companies?

I agree. If a business knows there is no risk of it failing, there is no incentive to be fiscally responsible. Now that the automakers are on notice that the taxpayers will bail them out no matter what, they can take any risk and throw money around like mad men. It breeds inefficiency and incompeteance.

If a company goes out of business, and there is still a viable market for their product or service, someone else will fill the void. If they want to be successful, they will not follow in the footsteps of their predecessor. So I have no problem with poorly run companies going belly-up.

Call me a cynic if you will, but I think this bail-out was more about labor unions than about the auto industry. If GM or Chrysler cease to exist, someone else will take their market-share and likely hire those workers who just lost their jobs. But UAW might have benn left on the sidelines......

The bailout is a great deal for the government. They take your money (they have none of their own) and give it to the automakers in exchage for a 60% share in the company. They get 60% for nothing! If the automakers paid them back, the government would lose their share, so they have no incentive to collect repayment in full. The only loser in the deal is the taxpayer, who gets nothing in return for their investment.

The unions certainly factored in. But so did the entrenched power structures of the existing companies' executives, boards, major shareholders, and major creditors. Once capitalist interests gorw to a certain size, they get very good at feeding themselves. Those interests had been greasing palms in Washington for decades, and they called their favors in. Same as the big financial companies, where unions weren't much of an issue.

1. When they pay the money back, I expect to see a post of apology from you acknowledging the fact.

2. Ford did not stick around for the bailout from taxpayers, because Bill Ford found the financing from other sources. I suspect that Nardelli and Wagoner would have went elsewhere, if they had been aware of what that asshole Steve Rattner had up his sleeve.

So now you are arm in arm with the MSM? Interesting how you pick and choose when the MSM is a good source of info. When? When they report what you want to hear about someone or something you do not like.

Confiscated. What a joke, did you ever cry out in dismay while the taxpayers money was being stolen by KBR? Nooooooooo

I'll be very happy if we get that money back with interest.... But I just don't see it happening. There's a reason those companies were worth so little.

Sure. GM stock fell from what to what during the Bush years? Just nine years ago it was over $80/share. And by the way, GM revenues in 2004 was just under $100 billion, for just the first 6 months.

You can say whayever you want, and you will, but GM did not cause their own demise.

If every car company had run into just as much trouble -- needing to be loaned many times their total value just to avoid bankruptcy -- GM might argue they were just victims of the broader economy. But although every car company ran into some trouble, only GM and Chrysler needed to be bailed out to the tune of vastly more than their total value. And only GM and Chrysler had that total value plummet under $2 billion. Not Ford. Not Toyota. Not Honda, Hyundai, Kia, Volkswagon, Mazda, or BMW. But then those companies weren't pre-stressed by legendarily incompetent leaders like Rick Waggoner. They hadn't all been positioned for years to be perfectly prepped for utter failure when the market turned ugly.

Which shows your ignorance in the matter. Ford was 'bailed' out when Bill ford secured loans of astronomical proportions, which they are now trying to renegotiate.

As for Toyota and the rest, you have absolutely no idea how the Japanese government subsidized them so they would not go under as well.

Why am I wasting my time.

If you have evidence that these other companies got government loans worth many times the total value of those companies, the way GM and Chrysler did, sime present it.