No specific timetable exists for the government to relinquish stakes in General Motors and Chrysler, a top US official has said.
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Senior administration autos task force member Ron Bloom told a Senate Banking Committee hearing that President Barack Obama wants to get out of the auto business “as soon as practicable” but not before the two carmakers can demonstrate viability, Reuters reported.
He also said there was a reasonable chance to recoup billions that taxpayers have sunk into the companies and that there were no plans for new assistance.
Bloom reportedly said an exit plan would depend on how GM and Chrysler perform as well as overall economic factors and industry sales, which were slumping sharply this year.
“I don’t have a point estimate that judges when we can exit,” Bloom told the committee, adding that setting a timetable could disrupt markets.
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By GlobalData“I do believe that there is a reasonable probability that we can get most of, if not all of our money back. That’s the way I said it to the president and that’s the way I say it to you now,” Bloom said.
The US government has taken an 8% stake in Chrysler, which is exiting Chapter 11 in an alliance with Fiat, and a 60% investment in GM, which entered bankruptcy protection on 1 June, while government aid dedicated to Chrysler totalled more than US$12bn and GM has received $50bn, and billions more in taxpayer funds have been spent to help affiliated finance companies and suppliers, the report noted.
Some lawmakers, mainly Republicans, were sceptical of Bloom’s assessment that restructuring may pay off for taxpayers, Reuters said.
Bloom said GM’s capital structure would be conservative once it is out of bankruptcy, with more room for equity and fewer deductions for debt and other liabilities.
Bloom also said the task force believes Ford can survive and is in regular contact with automaker executives.
