Auto bailout: 78% spent so far

NEW YORK (CNNMoney.com) -- The U.S. auto industry has spent nearly 78% of the taxpayer funds lent to it by the Treasury Department through the Troubled Asset Relief Fund, according to a report released Thursday by a bailout overseer.

Neil Barofsky, special inspector general for the $700 billion TARP program said in his report that General Motors, Chrysler, GMAC and Chrysler Financial have spent $59.7 billion of the $76.9 billion that they received.

The vast majority of the spending was used to cover day-to-day operating expenses. GMAC and Chrysler Financial used the funds primarily to beef up their capital reserves so they could initiate more auto loans.

The report is the latest glimpse into how bailed out companies have used their TARP funds, and the first time taxpayers have seen how automakers have opted to spend their bailout money. It follows a similar report released by SigTARP in August that provided information from bailed out banks.

Previously, Treasury did not require companies that received TARP money to show how they were using it, claiming that it was not possible to show on a bank-by-bank basis.

But Barofsky said Treasury opted to reverse that position following Thursday's report, given Barofsky's demonstration that recipients could track their own TARP funds.

"[Treasury's] adoption of this recommendation is a significant step forward in providing the American taxpayers with the transparency they deserve on how their money is being used," Barofsky said in the report.

In addition to day-to-day expenses, GM said it spent $2.8 billion to resolve parts supplier Delphi's bankruptcy and $1 billion to wind down the parts of its business that remain in bankruptcy. Chrysler has used all of the funds that it has spent on operating costs.

GMAC used its entire allocation to grow its capital reserves, and it said the TARP funds helped it grow its loan originations from $1 billion in the fourth quarter of 2008 to $4.5 billion in the second quarter of 2009. Chrysler Financial, which was absorbed by GMAC, paid back its TARP funds in full. It had used the funds to initiate 85,000 new auto loans.