GM, Chrysler to repay federal funds, Obama says

(MCT) WASHINGTON — General Motors and Chrysler will repay all of the money the Obama administration spent on their restructurings, President Barack Obama said Thursday in an interview on ABC’s “The View.”

But a White House official said the president did not mean to suggest the companies would pay back all of the $86 billion spent by Obama and former president George W. Bush.

While the companies have said they wanted to pay back the government in full, no outside analysis had ever suggested it was possible.

The government’s most recent official estimate forecast a loss of $24.3 billion; a Detroit Free Press analysis suggested it could be half that amount, given the improvement in the U.S. auto industry.

Obama said that before his administration shepherded GM and Chrysler through bankruptcy in 2009, the government “had been bailing them out for years before that, just asking nothing in return.”

“You now have all those U.S auto companies showing a profit,” Obama said on “The View,” in an interview taped Wednesday. “They’ve rehired 55,000 workers. We are going to get all of the money back that we invested in those car companies.

The 55,000 jobs is a total for the entire U.S. auto industry since June 2009.

The Bush administration lent GM $13.4 billion and Chrysler $4 billion in December 2009, money Obama auto task force officials have maintained was unlikely ever to be recovered.

Obama said on “The View” that the recovery of GM and Chrysler, along with profits at Ford, validated the choices his administration made to shepherd GM and Chrysler through bankruptcy — a message he plans to emphasize during his visit to GM and Chrysler plants in Detroit on Friday.

“And the best thing is we’re now creating an entirely new clean energy, clean-car technology around advanced batteries and whatnot that will make us a world leader,” he added.

GM is expected to launch a public stock offering later this year, the first step towards unwinding the government’s 60.8 percent stake. Chrysler has said it would not consider a stock sale until 2011; the U.S. government owns 9.9 percent of its equity.

GM has paid back $7.7 billion in loans and interest on the $50.7 billion spent in its rescue, while Chrysler has paid back $2.5 billion of the $12.5 billion it received. The U.S. Treasury also spent $16.3 billion stabilizing Ally Financial, formerly GMAC.

The Associated Press

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