GM and Chrysler are unlikely to pay back their bailout debts to the US taxpayer. Photo / AP

GM and Chrysler are unlikely to pay back their bailout debts to the US taxpayer. Photo / AP

WASHINGTON - Taxpayers are unlikely to recover their full investment in General Motors or Chrysler, government investigators said in the latest review to cast doubts that the government will recoup the $80 billion ($113.44b) it poured into the two automakers.

The Government Accountability Office concluded that General Motors and Chrysler Group likely won't be valuable enough for the Treasury Department to break even on its investment in the two auto companies that went though bankruptcy earlier this year.

The GAO also revealed that the Obama administration is closely scrutinising the finances of GM and Chrysler and has set some requirements on production even though it has said it will maintain a hands-off approach on the automakers' daily operations.

To recover the loans Treasury gave Chrysler and GM to keep them afloat, the automakers would have to reach valuations they didn't approach even when they were healthier.

Treasury officials said they were considering a series of initial public offerings to dispose of the government's 61 per cent stake in GM.

For Chrysler, a private sale of the government's nearly 10 per cent stake is more likely because of the government's minority ownership.

GM would need a market capitalisation, or the market value of the company's outstanding shares, of $66.9 billion for Treasury to make its money back, according to GAO. GM's peak market value was $57 billion in 2000. Chrysler, which was last publicly valued at $37 billion in 1998 when it merged with Daimler, would need a market value of $54.8 billion.

Treasury officials told GAO that the companies' previous equity values were not comparable because GM and Chrysler have undergone substantial reorganisations through bankruptcies. The Obama administration has said it is confident it can recover the bulk of its investment in the GM and Chrysler restructurings.

GM spokesman Greg Martin said "if we get our job done, the government has an excellent chance of getting a return on its investment." Chrysler declined to comment.

In September, the Congressional Oversight Panel reviewing the $700 billion Troubled Asset Relief Program said most of the $23 billion initially provided to General Motors and Chrysler late last year was unlikely to be repaid. GAO did not provide an estimate of how much might be returned to taxpayers.

Treasury officials reiterated that they don't plan to be involved in the companies' day-to-day management. But as a major creditor and equity holder, Treasury is closely scrutinising the financial well-being of Chrysler and GM.