Chrysler Pays Back Its Government Loans
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by Jeff Gilbert
WWJ AutoBeat Reporter
Chrysler employees are sporting big buttons with the word “PAID”, as they celebrate the repayment of 7.6 billion dollars in government loan money.
“Chrysler Group repaid, with interest, by wire transfer to the United States Treasury, and by bank transfer to the Canadian government, every penny that had been loaned less than three years ago,” announced CEO Sergio Marchionne, at the company’s Sterling Heights Assembly Plant.
The deal also cuts the U.S. government stake in Chrysler to 6.6 per cent, and the Canadian government stake to 1.7 per cent. Those stakes will likely be sold later this year, when the government launches an initial public offering of stock.
The repayment comes as Chrysler nears the 2nd anniversary of its emergence from bankruptcy on June 10, 2009.
“Obviously the company has moved even more quickly than even we had hoped, and certainly more quickly than most would have predicted,” said Ron Bloom, who’s currently the president’s advisor on manufacturing, and served on the Auto Task Force. “I don’t think anybody two years ago would have said that this day would have happened today, and that’s only good news.”
The news was also good for Chrysler workers.
“I think it’s great,” said worker Darryl Derriberri. “I knew we’d do it. Just a matter of time.”
Others predicted good things for the company going forward.
“Chrysler has the greatest work force there is. If people are committed, they’ll get the job done.”
The repayment moves Chrysler’s debt from the federal government, to more traditional sources, like banks and bondholders, who considered Chrysler too big a risk two years ago.
It also saves Chrysler 300 million dollars a year in interest payments.
“That’s a lot of money,” said Marchionne. “I don’t know about you, but 300 million dollars, that’s a huge amount of money every year.”
Marchionne promised to do all he can to make sure Chrysler never needs government help again. And, he gave workers one prescription for long-term success.
“We need to continue to work our pants off.”
Follow Jeff Gilbert on Twitter @jefferygilbert.