US to Lose $3.7Bn On Chrysler TARP Loans

After earlier this month Gene Sperling, senior counsel to Treasury Secretary Timothy Geithner talked about the prospects of the US government to lose $30 billion out of the $82 billion pumped into the automotive industry the past year, Chrysler backs his announcement with a bankruptcy court filing in which it says the Treasury will not recover a dime of the $3.7 billion in loans provided through the Troubled Asset Relief Program (TARP).

According to MSNBC, citing a Reuters report, the Tuesday filing says that the US, despite its proofs of claim for unpaid principal, interest, fees and expenses will "receive no recovery on account of such claim" for the Old Carco (the remains of the former Chrysler).

In the recent past, the US gave $50 billion to GM (exchanged for a majority stake, except for $6.7 billion) and $12 billion to Chrysler. GMAC received $13.5 billion from the Treasury Department, which now owns 35.4 percent of the financial company.

Still, the loss estimated by Sperling in early December (to which this latest development may be added), is better than the initial estimate of $44 billion. And the US is not sorry for saving a vital industry.

"The real news is the projected loss came down to $30 billion from $44 billion. It was right decision then and the right decision now. It was a courageous decision by the president to give GM and Chrysler a rebirth even though he knew it was not going to be politically popular."