Chrysler Repays $7.6B In Government Loans
by Jeff Gilbert
WWJ AutoBeat Reporter
STERLING HEIGHTS (WWJ) UPDATE (5 p.m) at this link.
Chrysler is making good, paying back billions in loans to the U.S. and Canadian governments, less than two years after emerging from bankruptcy.
The carmaker paid off a combined $7.6 billion to the U.S. and Canadian governments by wire transfer Tuesday morning. “We dared to dream big, and we delivered on that dream,” said Chrysler CEO Sergio Marchionne, at Chrysler’s celebration, later Tuesday.
“The commercial that we aired during this year’s Super Bowl gave a good portrayal of what Chrysler has become today: a company that has been to hell and back, and yet still dares to dream; a group of people free to venture beyond the ordinary and expected, free from the prejudices and limitations of habit, free to express their creativity and even break the conventions of what a TV commercial should be,” Marchionne said.
Follow Jeff Gilbert’s Twitter updates (@jefferygilbert) from the event here.
“This is huge, that they are out from under the onerous loans,” said Automotive News Publisher Peter Brown, speaking of Chrysler’s borrowing money from private sources to pay off its government loans, which carry a much higher interest rate.
Marchionne was eager to repay the loans — $5.8 billion to the U.S. government, and $1.8 billion to Canada and Ontario. He told those gathered at the opening of Fiat of Lakeside, that this will be the day Chrysler regains its “independence and accountability.”
Marchionne told reporters that he felt that the government assistance given Chrysler was an “exceptional event” that should not have to be repeated. He said it was his job to make sure Chrysler never has to ask for government help again.
“I made a promise to the investors and made a promise to myself that we would never re-create the conditions that lead to a failure of our business model in the past.”
Chrysler’s celebration, Tuesday, took place, at its Sterling Heights Assembly plant. That plant had originally been on the list of facilities that were part of “Old Carco”–the old Chrysler that was left behind in bankruptcy. Now it’s been updated, and builds the Chrysler 200 and Dodge Avenger mid-size cars.
Joining Marchionne at Tuesday’s event was Ron Bloom, currently the president’s point man on manufacturing, who was a member of the auto task force that rescued Chrysler and GM.
Automotive News’ Peter Brown says even after cutting costs in bankruptcy, Chrysler’s future was not guaranteed.
“If you’d have asked people a couple of years ago, after their bankruptcy, ‘What are the odds on Chrysler?’ probably the optimists would have said 50-50.”
Brown says the odds are much better today, thanks to cost cutting and a strong product lineup.
“They’re through the most dangerous part.”
Veterans who worked at Chrysler through the Daimler years and the Cerberus years, say they feel the culture has made significant changes for the better.
“It’s an empowered culture,” says purchasing VP Dan Knott. “We can actually make decisions. We can do what we want to do. We get the resources and funding to do it.”