No Runny Eggs

It’s been a while since I last ran the numbers on the transfer of taxpayer wealth to UA…er, bailout of GM, Chrysler, and their affiliated credit companies. Due partly to the profit turned today by the UAW VEBA on GM’s bankruptcy, and due partly to wild claim from Car Cza…er, Commissar Steven Rattner that the taxpayers will get back all but $14 billion (I think The Right Scoop misquoted from the clip due to an off-camera cough) of the auto-related bailouts, it’s time to once again go through what has and has not been recovered. Thankfully, the Treasury Department has a PDF-ed spreadsheet to help track all the changes between last October’s look and the end of November 2011. Before I do, however, I have to note Zip caught the expiration of yet another Obama statement – that the Treasury would be paid back in full for the auto bailouts.

To review, back in the beginning of October 2010, $65.89 billion of the $72.59 billion spent on old General Motors, new Government Motors, old Chrysler, new Chrysler/UAW Motors/Fiat, Chrysler Financial, and GMAC/Ally (more-correctly called Government Bank), including $0.04 billion in notes taken out by new Chrysler I was previously unaware of, was still outstanding. Since then, the Treasury has recovered:

• $13.50 billion from the sale of some of its common stock in GM between 11/18/2010 and 11/26/2010, leaving it with a 32.04% stake.
• $2.14 billion from the early buyback by new GM of all the Series A preferred stock held by the Treasury.
• $0.11 billion of the $0.99 billion in loans that remained at old GM, paid to the Treasury on 3/31/2011, 4/5/2011 and 5/3/2011 as old GM was liquidated.
• $5.46 billion from new Chrysler to “fully” extinguish the TARP loans, including the previously-undisclosed notes, on 5/24/2011. However, $3.5 billion of that repayment appears to have come from an Energy Department loan program meant for modernization of assembly plants dedicated toward fuel efficient/”clean” vehicles.
• $0.56 billion from Fiat for the remaining 6.6% stake (plus the rights to “excessive” proceeds from the sale of the UAW’s share of new Chrysler) the Treasury held in new Chrysler on 7/21/2011.
• A bit under $0.01 billion ($9.67 million) as the last bit of cash was wrung out of the remains of old Chrysler, credited on 12/29/2010.
• $2.67 billion from Ally for the extinguishing of the Trust Preferred Securities held by the Treasury on 3/2/2011.
• $0.79 billion in dividends on preferred stock in Ally between November 2010 and November 2011.

The $25.24 billion recovered over the past 13 months brings the amount still outstanding from the bailout of the auto industry down to $40.65 billion. The Treasury also converted 110 million of the nearly 229 million perferred shares it held in Ally to 531,850 common shares to give it control of 73.8% of the common shares.

The remaining claims on assets the Treasury holds are:

• 500,065,254 common shares of new GM. At yesterday’s close of $19.47 per share, the Treasury would get about $9.73 billion (give or take brokerage fees) if they were able to sell their 32.04% stake.
• $0.88 billion in loans still owed by old GM, which will likely never be recovered.
• A continuing stake in whatever assets can still be liquidated from old Chrysler, likely to be very minimal.
• 118,750,000 Series F-2 Preferred shares in Ally Financial, which if Ally does not pay $5.94 billion plus any outstanding dividend (9% annual dividend, or $0.53 billion per year) to extinguish the preferred shares, will be converted to, at the present value, 513,000 common shares in Ally at the end of 2016. The dividend through the end of 2016 would net the Treasury $2.67 billion.
• 981,971 common shares in Ally, which represents 73.8% of the outstanding common shares in the privately-held company.

Last year’s estimate of $17 billion down the UAW hole once all the dust settles still seems quite operative, assuming the government is willing to let go of both GM and Ally. If it’s not willing to let its seizures go, then far more money will have gone down the UAW hole.

Let’s compare that to the UAW take. I previously covered the all-but-guaranteed $28.39 billion in post-bankruptcy payments from GM (not counting anything from the sale of the UAW’s stock in GM, currently worth $3.12 billion) on $20.36 billion in pre-bankruptcy liabilities from GM the UAW VEBA will get, and except for the dividend payments that have now made UAW’s profit official, nothing has changed. I hadn’t covered the UAW’s recovery schedule of the $10.5 billion owed it by old Chrysler as, up until earlier this year, it had not fulfilled its (voluntary) promise to file reports with the SEC. Now that it is filing the reports, that can be tracked.

Much like it did from GM, the UAW received the cash set aside by old Chrysler pre-bankruptcy for the VEBA. In this case, it was about $1.5 billion. For the remaining $9 billion in unsecured claims against old Chrysler for its VEBA, the UAW received what is currently a 44.7% stake in new Chrysler (after various options exercised by Fiat diluted its initial 67.7% stake) and a $4.59 billion unsecured note carrying an effective 9% annual interest rate and maturing in July 2023. While the repayment schedule is back-loaded, payments did begin in 2010, with a $315 million payment in 2010 and a $300 million payment in 2011. Assuming all the payments are made, the UAW will get $9.16 billion.

That does not include any money it might get from the liquidation of its stake in new Chrysler. That is limited to $4.25 billion (plus 9% compounded annually starting from 2010, or about $5.05 billion if Chrysler goes public in January 2012 and the UAW sells its entire stake) with any excess going to Fiat after Fiat bought the Treasury’s rights to that excess for $60 million and the Canadian government’s rights to that excess for $15 million. Fiat also holds a call option to buy up to 40% of the original UAW stake between mid-2012 and mid-2016 for, depending on whether Chrysler has gone public, either the going stock price or a formula.