1. Latest News
  2. Submit Press Release

Michigan Chrysler Dealers Feel Government Debt Slipping Away; Chrysler Pays Off Fed Loans

Chrysler Group LLC needed to be bailed out in 2009 and has been partially owned by two federal governments for almost two years. Recently, Michigan Chrysler dealers have heard the announcement that Chrysler is planning on paying of loans soon.

Michigan Chrysler Dealers Learn Chrysler to pay off Federal loans with new Investments.
PRLog - May 3, 2011 - DETROIT -- DETROIT, M.I. – Michigan Chrysler dealers may have struggled in 2008 to 2009 when the automotive industry got difficult to navigate. In 2009, Chrysler Group LLC had to take the help of $2.1 billion from the U.S. Treasury and $500 million from Canadian governments to make it through the recession. Near the two year anniversary of its bankruptcy, Chrysler plans on paying back its loans to both Canada and U.S.
Originally the plan was to pay back the governments with three separate payments. One payment has already been paid; the U.S. Treasury charged Chrysler with $1.3 billion in interest in 2010.
[Rewind: Michigan Chrysler Dealers Hear Chrysler Posts Net Loss for 2010, but 2011 Outlook Brighter]
The next two payments were scheduled for 2014 and the final in 2017. In a press release, Chrysler CEO Sergio Marchionne commented on the corporation’s ability to pay off the loans, saying, “It will be a great accomplishment if I get it done in two years.”
Fiat was also another big supporter that helped Chrysler get through the bankruptcy. Originally Fiat received 20 percent interest in Chrysler by offering management, engineering, technical expertise and even global distribution. This year the number raised by 10 percent as Fiat received a higher stake in the company.
Chrysler is seeking to take out $2.5 billion in new debt from institutional investors to secure a $3.5-billion, six-year loan and a $1.5 billion line of credit to pay off the current financial loans. Also, Fiat is investing an additional $1.27 billion to help Chrysler with its repayment.
With the loans being repaid, the ownership structure of Chrysler will also shift.
Current ownership:
•   A UAW health care trust currently has 59.2 percent
•   Fiat 30 percent
•   U.S. Treasury 8.6 percent
•   Canadian governments 2.2 percent
Shifted ownership:
•   Fiat will have 51 percent
•   UAW trust 41.5 percent
•   U.S. Treasury 6 percent
•   Canada 1.5 percent
Although Chrysler seems to be back on track, the bankruptcy had harsh effects on the company and its associates as tens of thousands of jobs were lost, four plants were closed and 749 dealerships were shut down. Dealerships included dozens of Michigan Chrysler dealers; 14 specifically in the Detroit area.  
The outlook has changed as Chryslers’ remaining dealerships are making more money, there are thousands of workers that have been rehired, a factory was saved and there are more vehicles that have been added to the Chrysler lineup to bring back customers. It is expected that Chrysler will report its first profitable quarter since 2009 once the April sales numbers are available.
Michigan Chrysler dealers were not the only dealerships to see their corporation struggle as General Motors’ dealers lived through a bankruptcy as well. There is good news for GM as it may overtake Toyota Motor Corp and reclaim its title as No. 1 largest automaker.
[Rewind: Michigan GMC Dealers Could See GM Reclaim Top Spot from Toyota, First Time Since 2008]
Check back with MI Auto Times as we continue to cover the recovery of the auto industry.
MI Auto Times covers all Michigan automotive news all the time, featuring newly released vehicle recall information, relevant Michigan automaker news, vehicle ratings and comparisons, and everything else auto-related Michigan and world readers need to know.
Got a hot tip? Send your news tips to news@miautotimes.com or connect with us on Facebook: www.facebook.com/MichiganAutoTimes.
[Source(s): The Detroit News, Detroit Free Press]

--- End ---

Click to Share

Contact Email:
***@miautotimes.com Email Verified
Source:Porta Press
Location:Detroit - Michigan - United States
Industry:Cars, Automotive
Tags:michigan chrysler dealers, general motors, fiat, michigan gmc dealers, toyota motor corp
Verified Account Phone Number

Disclaimer:   Issuers of the press releases are solely responsible for the content of their press releases. PRLog can't be held liable for the content posted by others.   Report Abuse

Trending News...

Like PRLog?
Click to Share