Taxpayers stand a reasonable chance of recouping aid to automakers General Motors Co. and Chrysler Group but still face the risk of losses, U.S. Treasury Secretary Timothy Geithner said on Thursday.
Geithner, testifying before the U.S. Senate Appropriations subcommittee, said he was aware of concerns over GM's claims in a commercial that it has repaid its government loans, and wanted to be clear there was still risk of taxpayer losses on GM and Chrysler.
He said there was a "reasonable chance now that we will recover all of the dollars we put into these companies" since January 2009, when the Obama administration took office.
"We still have substantial equity investments left in those companies, and as a result, some risk of loss, although a fraction of what we feared," Geithner said.
Geithner said the Obama administration wants to exit investments in private companies "as quickly as we can".
U.S. Senator Susan Collins, a Republican on the panel from Maine, said she believed an advertisement run by General Motors saying it had repaid its government loan early was misleading "because it left the impression that General Motors had repaid all of the taxpayers investment into the company."
Kevin Puvalkowski, the Treasury's deputy special inspector general for the Troubled Asset Relief Program, pointed out that GM had in fact repaid the funds from an escrow account containing government funds that was set up when GM exited bankruptcy proceedings last year.
He said it was "good news" GM did not need the money to fund its operation but it essentially paid off a government loan with taxpayer funds. The repayment did nothing to reduce the government's equity stake in the automaker, he said.
