(Detroit News) – The U.S. Treasury Department boosted its estimate of government losses in the $85 billion auto bailout by $170 million.
In the government’s latest report to Congress this month, the Treasury upped its estimate to $23.77 billion, up from $23.6 billion.
Last fall, the government dramatically boosted its forecast of losses on the rescues of General Motors Co., Chrysler Group LLC and their finance units from $14 billion to $23.6 billion.
Much of the increase in losses is due to the sharp decline of GM’s stock price over the last six months.
GM was trading at noon today at $24.24. It’s down 35 percent over its 52-week-high of $37.23, but the Detroit automaker has rebounded from a low set last year of $19.05.
The Treasury, which initially held a 61 percent majority stake in GM, now holds a 26.5 percent share, or 500 million shares in GM. To break even, the government would need to average $53 per share for its remaining stake.
At current prices, the government would lose more than $14 billion on its GM bailout.
The sharp decline in GM’s stock price has put the government’s sale of its remaining shares on hold.
The government booked a $1.3 billion loss on its $12.5 billion bailout of Chrysler.
As part of its $17.2 billion bailout, the Treasury still holds a 74 percent majority stake in Ally Financial Inc., the Detroit-based auto lender and bank holding company. Ally, formerly known as GMAC, put its IPO on hold indefinitely last year because of market weakness.