WASHINGTON - The U.S. Treasury Department said Monday it will lose US$1.6 billion on a loan made to Chrysler in early 2009.
Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors have said.
Treasury said Monday that Chrysler repaid $1.9 billion of a $4 billion loan, which was extended before the company filed for Chapter 11. The government hopes to get another $500 million from the company that emerged from bankruptcy, Chrysler Group LLC.
The original loan was made in January 2009, when the Bush administration was scrambling to rescue Chrysler, GM and their auto financing arms.
The Congressional Budget Office estimated in March that the government's $85-billion bailout of the automakers would cost taxpayers $34 billion.
Much of it will depend on how much the government recovers from its eventual sale of nearly 61 per cent of GM and about 10 per cent of Chrysler.
GM has said it could conduct a public stock offering later this year. Chrysler officials have said a public stock offering is not likely before 2011.
In Canada, the federal and Ontario governments gave Chrysler C$250 million at the end of March 2009 so it could meet payroll and other immediate obligations. When the automaker filed for bankruptcy protection in the spring, the governments gave it approximately $3 billion to support its restructuring process.
The Treasury Department made the announcement about the loss from Chrysler on a day when GM reported its first quarterly profit in nearly three years. That moved GM closer to a stock offering that would repay at least part of the $43 billion it owes the government.
GM on Monday announced it had made net income of $865 million, or $1.66 a share, in the first quarter. That compared with a loss of $6 billion, or $9.78 a share, a year earlier. Debt and other expenses were cut by its stay in bankruptcy court last year. Strong new-model sales also helped, GM said.
