Chrysler Ready to Pay Back Government Loans

by Jeff Gilbert
WWJ AutoBeat Reporter

MACOMB (WWJ) Chrysler is poised to repay its loans from the U.S. and Canadian governments, with money borrowed from private sources.

"Tomorrow's going to be a huge day for us," said Marchionne, as he spoke at Monday afternoon's grand opening of Fiat of Lakeside in Macomb County.

Chrysler has already scheduled a Tuesday afternoon event at its Sterling Heights Assembly plant, inviting a number of government guests.

"It is our expectation tomorrow that Chrysler will again regain its independence and its accountability to the public markets," said Marchionne.

Marchionne told reporters that nothing would be official until the money is actually wired to the governments. But, the expectation was that this would happen before the afternoon ceremony.

The ceremony won't be held in Washington, as it was when Lee Iacocca paid back government loans, because times are different now, Marchionne says, and the money is transferred electronically. He also says it would be up to the White House to arrange that, and he didn't want to invite himself.

The loan repayment comes almost within a month of the second anniversary of Chrysler's emergence from a government sponsored bankruptcy. It's something Marchionne feels should not be repeated.

"What President Obama and the Canadian government did here was something exceptional, hopefully never to be repeated again," he said. "But I think we've earned the right to stand on our own two feet and move on."

There have been reports that Chrysler is planning to add shifts at a number of plants. Marchionne said he would like to see that happen. But, he said no decision has been made, because they don't want to add production unless they believe it will be needed, long term.

The government loans are being repaid with money raised from banks, and the sale of bonds, Marchionne believes that, in the minds of consumers, it will be better for Chrysler to be indebted to banks, than being indebted to the federal government.

"There is something that is endemic to the American culture which has to do with the ability of standing up on your own, and doing stuff."

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