#Bailout

Recently we reported that the auto bailout cost had increased to $25 billion, mostly due to General Motors‘ plummeting stock price. Things could, however, get worse for GM before they get any better – if they get any better.

The auto bailout has been debated time and time again, on whether it was worth American taxpayers’ money, despite saving a million jobs. A recent poll found that the majority of Americans still opposed the auto bailout, and a recent report that the cost has now been increased to $25 billion doesn’t help its cause.

Election season is upon us and that means one thing, more mudslinging than a figure-eight demolition derby.

Italian automaker Fiat purchased the U.S government’s remaining holdings in Chrysler today. Fiat paid $560 million to the Treasury Department for the government’s 98,000 shares.

General Motors CEO Dan Akerson is looking forward to the day when he can relax on his yacht, sipping Mai Tais on the deck…and knowing full well that the federal government has finally sold its stake in GM, and has completely divulged itself from the company as it did with Chrysler.

A statement released today by the White House seemed to take credit for the resurgence of the American auto industry, with President Obama’s bailout plan credited as the driving force behind it.

Two years after a government bailout and rescue by Italian automaker Fiat and Chrysler has announced detailed plans to repay its government loans.

Chrysler is preparing to pay back $6.6 billion on government loans, but the company will do so not from its own cash but by re-financing existing debt.

Fiat is looking to up their stake in Chrysler from 20 percent to over 50 percent, according to reports in the Detroit News. Fiat was awarded a 20 percent stake in the company as part of Chrysler’s bankruptcy proceedings in 2009, and can increase its ownership as it passes a series of milestones. Marchionne also hinted that a Chrysler IPO may come in the second half of 2010.

Steven Rattner, the man appointed by President Obama to oversee the auto industry bailout, claims that internal GM documents that were analyzed in the early days of the bailout pegged the cost of producing a Chevrolet Volt at $40,000 per car.

General Motors long awaited IPO began trading on Thursday, and was up approximately $2 as of 12 noon, Thursday. Listed at $33 a share, the stock price quickly climbed to $35 a share, as GM’s CEO Dan Akerson rang the opening bell at the New York Stock Exchange.

Steve Rattner, who oversaw President Obama’s auto industry bailout, told Bloomberg News that GM’s Initial Public Offering share price was undervalued.

General Motors will buy $2.1 billion worth of preferred stock as part of a move to pay off its $49.5 billion in federal bailout loans.  GM will also launch a series of measures to reduce its debt by $11 billion.

General Motors CEO Ed Whitacre is expected to announce today that the automaker has already paid off all of its $6.7 billion in loans to the U.S. and Canadian governments. Back i n November, GM announced it would begin paying back the loans and today Whitacre is scheduled to make the announcement that the remaining $5.8 billion has now been returned to the taxpayers that supported the American auto giant when it was in trouble.

Earlier this week General Motors produced its last Pontiac for the U.S. market, ending the brand’s 82 year run. The final vehicle to roll off the assembly line at 12:45 p.m. on Wednesday, November 25th at the Orion Township plant was a rather unspectacular white G6 sedan which is scheduled to be sold to a fleet. It’s hardly the sort of send-off one might expect for a brand that has produced such memorable legends as the GTO and Firebird.