Chrysler Repays Bailout Loans From US And Canadian Governments

Congratulations Chrysler, you're now indebted to other financial institutions. Did the govt make money off of Chrysler? From what I read they borrowed $6.6 billion, paid back $7.6 billion, $1.8 billion of which is fees. Now how much are the govt issued shares worth?

The problem i that this doesn't take into account the billions lost in the bankruptcy. They're only paying back the "loan" portion.

The Chrysler 1979 goverment loan (1.5 billion) was paid in full by 1983.
The US Treasury profited $350 million.
Is the US Treasury doing better now?

I believe the article said the Goverment issued shares are worth 1.9 Billion of which they do not expect to get all back.Some of this they will get back when Chrysler does an IPO. However part of that money was invested in the "Old" Chrysler which Fiat does not own.Being indebted to other financial insitutions puts Chrysler in a very similar format that Ford is currently in,just on a much smaller scale. The difference between 1979 and now is that I believe Chrysler did not declare a BK as they did this time.Never the less it is an improvement with Chrysler in a very short period of time and the lower interest allows them to hold on to more of their profit. Now that they have revamped all the older models they need to focus on the smaller fuel efficient models so they can keep up the sales momentum.

The important part with this payoff to the Gov is it gives Fiat more ownership. Not a fan of another Company owning Chrysler but it is what it is. This in turn gived the union less ownership which is huge. And Chrysler dosen't have to account to the Government again a plus. The interest is much less which is about 3/4 of a BILLION dollars. There profitt margin will be higher and the payoff to the new lenders will happen sooner. Currently there sales increases are one of the best with less incentive amounts with less sales to fleet. This gives Chrysler the breathing room to accelerate development to higher mileage vehicles which is already in the works. This is quite a success story! I watched the payoff ceremony and when it got to Holifeild I had to shut it off, He just pisses me off.

Sportbike80-To put your comment into perspective then Ford is also broke because they owe a lot more money to private banks then Chrysler does. The difference is Ford is a significantly larger company and currently has more fuel efficient cars. Also Ford is not owned by another company. Saying that I have to echo what bfghemicuda is saying.They are no longer "government motors".Further Chrysler is now, according to Automotive News planing to buy the Us and Canadian Governments remaining stake in the company perhaps by August of this yr.So you can't really say that they are broke. The fact that they were able to do this is proof that Chrysler is in fact selling cars again.True many of the cars are not what auto enthusiasts dreams are made of. However the auto buying public only really cares about a car that is realativly quite,refined and appears to be well put together. The 200 may have too light steering and is not a handling demon but it qualifies on all other accounts I mentioned. The Fiat 500 is selling because it offers more fun to drive qualities then your average Jap or Korean econobox. The people who buy it don't care about how much room it doesn't have. The fact is it will seat 4 and it offers a semi convertable top now. People buy for the same reason people buy Mini. Your getting somthing a little special for your limited dollar to spend.The Charger and Challenger and 300 are big RWD brutes but offer somthing a Ford Taurus does not. RWD with optional AWD and a V8. The cars weigh less then the Taurus and frankly better looking and better driving.Chrysler is coming out with a c segment compact that is expected to get 40 MPG this yr.So even if their cafe is the owrst of the 3 right now it wont be for long.I think on the stewardship of Marchionne Chrysler will by in large feel like an American car company with a lot of competative products in the Future. Plus we get to finally have Alfa back in the USA!

I would have to agree blazinboy. The economic reprocussions of having 1.5 million people out of work rather quickly would have affected housing further with more forclosures. I would guess that a good chunk of the state of Michigan would have been out of work among other states.Talking about the red ink in California, there would probably would have been states that would have had to cut many government services.Banks would have been further affected as well. It would have ended up being a Domino theory. And the US government would have been further in debt then it already is.