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Unread 2011-05-24, 08:52 PM   #1
JDLM
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Default Way to go Chrysler

Chrysler celebrates after repaying government loans

Alisa Priddle/ The Detroit News

It's official. Chrysler Group LLC today confirmed the wire transfers have gone through, and the automaker has repaid loans from the U.S. and Canadian governments.
The automaker has repaid $5.1 billion in loans, as well as $1.8 billion in interest and other fees, releasing Chrysler from all monetary commitments to the governments less than two years after the bailouts kept them in business. Chrysler went to the capital market for lower-interest financing to get out from under the government loans that carried interest rates as high as 20 percent. The refinancing — which is much like refinancing a home mortgage — will save more than $300 million annually.
Today, Chrysler repaid the U.S. Treasury more than $5.9 billion; Canadian governments received $1.7 billion to retire their loans to the automaker.
At a celebration attended by 1,100 workers this afternoon at Chrysler's Sterling Heights plant, Chrysler CEO Sergio Marchionne wore a pin that said "Paid" on his customary black sweater.
"We dared to dream big, and we delivered on that dream," Marchionne said. "All of us remember that until just a short time ago, in the eyes of most, Chrysler had been condemned to death."
"I'm glad we got to this point," said Bill Parker, president of Local 1700 at the Sterling Heights plant. "It's gotta be a positive sign."
Refinancing, said UAW Vice President General Holiefield, "will make Chrysler more competitive," but more investment is key to long-term prospects.
Repaying the loans also "sets the right posture for both sides" for contract negotiations to replace the current contract that expires in September, he said.
Even President Barack Obama weighed in.
"Chrysler's repayment of its outstanding loans to the U.S. Treasury and American taxpayers marks a significant milestone for the turnaround of Chrysler and the countless communities and families who rely on the American auto industry," Obama said in a statement issued by the White House today.
"This announcement comes six years ahead of schedule and just two years after emerging from bankruptcy, allowing Chrysler to build on its progress and continue to grow as the economy recovers.
"Supporting the American auto industry required making some tough decisions, but I was not willing to walk away from the workers at Chrysler and the communities that rely on this iconic American company," he said. "I said if Chrysler and all its stakeholders were willing to take the difficult steps necessary to become more competitive, America would stand by them, and we did."
Obama said that while there is "more work to be done, we are starting to see stronger sales, additional shifts at plants and signs of strength in the auto industry and our economy, a true testament to the resolve and determination of American workers across the nation."
The Treasury committed a total of $12.5 billion to Chrysler under the AutomotiveIndustry Financing Program. With today's transaction, Chrysler has returned more than $10.6 billion of that amount to taxpayers through principal repayments, interest and canceled commitments. The Treasury continues to hold a 6.6 percent equity stake in Chrysler.
Taxpayers are unlikely to fully recover their remaining outstanding investment, $1.9 billion, in Chrysler. Some of that will be recouped when Chrysler has an initial public offering of its stock and the government sells some of its stake. That could come this year or next.
"Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise," said Marchionne, who also is CEO Chrysler's partner Fiat SpA:
"The loans gave us a rare second chance to demonstrate what the people of this company can deliver and we owe a debt of gratitude to those whose intervention allowed Chrysler Group to re-establish itself as a strong and viable carmaker," he said in a statement.
"Paying back the loans, along with the financial community's investment in our refinancing packages, marks another step in the company returning as a competitive force in the global automotive industry."
United Auto Workers' President Bob King also expressed gratitude for the government intervention, noting taxpayers have recouped more than just dollars from the companies' survival.
The 2009 bailout restored jobs and brought manufacturing once outsourced overseas back to the United States, he said. And Chrysler and General Motors Co. are turning around faster than expected, King added.
"Auto jobs are good middle class jobs," he said. "They support not only the auto workers and their families, but they sustain communities and millions of workers across the country."
The company borrowed $5.1 billion from the Treasury and $1.6 billion from the Canadian governments in June 2009. An additional $2.6 billion in available funds remained undrawn and are canceled.
The payoff comes more than six years ahead of deadlines established in the agreement that created the current company from the assets of the old Chrysler and a partnership with Fiat SpA.
In the two years under Marchionne's leadership, Chrysler has revamped its product lineup, invested $3 billion to upgrade its plants and hired 6,000 employees. The Fiat brand also returned to the North American market after a 28-year absence. The company also posted its first net profit in the first quarter: $116 million.
The refinancing consisted of a $3 billion term loan, $3.2 billion in securities and a revolving credit facility of $1.3 billion.
Chrysler used the financing, along with $1.27 billion from Fiat, to buy a larger stake in Chrysler, to repay the government.
"Everyone in the extended Chrysler Group family, from employees to union partners to dealers and suppliers, have worked tirelessly to deliver on our promises and to win back public trust in the company and our products," said Marchionne. "There is more work to be done as we remain focused on fulfilling the goals…"


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Unread 2011-05-24, 09:12 PM   #2
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Unread 2011-05-24, 09:21 PM   #3
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So they 'paid' it by just getting lower interest loans and using those funds? I guess that counts, but somewhat misleading.
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Unread 2011-05-24, 09:22 PM   #4
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Good job Fiat
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Unread 2011-05-25, 04:43 PM   #5
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Now if Chrysler can just get out from underneath Fiat and be a stand alone car company again.
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Unread 2011-05-25, 04:46 PM   #6
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Now if Chrysler can just get out from underneath Fiat and be a stand alone car company again.
No... no... no. Chrysler was shit before, i don't want to see it happening again and personally think fiat is a solid company that will do right by the Chrysler brand name.
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Unread 2011-05-25, 04:47 PM   #7
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Now if Chrysler can just get out from underneath Fiat and be a stand alone car company again.


They haven't been able to stand on their own 2 feet in years and should be kissing Fiat ass right now.
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Unread 2011-05-25, 04:48 PM   #8
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Originally Posted by turbotuner20v View Post
So they 'paid' it by just getting lower interest loans and using those funds? I guess that counts, but somewhat misleading.
Isn't that what GM did?
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Unread 2011-05-26, 02:56 PM   #9
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Isn't that what GM did?
Yes, and every GM nut hugger claimed that it was totally legit and it was in no way misleading.
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Unread 2011-05-26, 02:58 PM   #10
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So they Refi'd and celebrated? What?
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Unread 2011-05-26, 03:56 PM   #11
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If I refinanced something and save 10-15% interest on it I'd celebrate too... But not publicly while I still had that massive balance hanging over my head.
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Unread 2011-05-26, 04:11 PM   #12
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If I refinanced something and save 10-15% interest on it I'd celebrate too... But not publicly while I still had that massive balance hanging over my head.
That's kinda what I'm getting at. Don't pretend like you are in the black instead of the red.
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Unread 2011-05-26, 04:53 PM   #13
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I like the new 300s
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Unread 2011-05-26, 05:01 PM   #14
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Whats the big deal people refi their homes all the times to save on payment and intrest, quit hating
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Unread 2011-05-26, 05:06 PM   #15
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Whats the big deal people refi their homes all the times to save on payment and intrest, quit hating
No ones hating on the refi. Everyone agrees it's smart. Everyone's hating on the misleading wording making it sound like they just paid off all that debt.
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Unread 2011-05-26, 06:06 PM   #16
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They haven't been able to stand on their own 2 feet in years and should be kissing Fiat ass right now.
Yeah, since the first time the govt bailed them out in the late 70's.

Ah how history repeats its self again.

They should have let the shitty car company finally die.
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Unread 2011-05-26, 06:52 PM   #17
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Originally Posted by Ebanks View Post
If I refinanced something and save 10-15% interest on it I'd celebrate too... But not publicly while I still had that massive balance hanging over my head.
GM did this, but went overboard on the making it public part. Even made a commercial having their CEO go on about how they paid it off.

Something went wrong. Please make sure you added the video correctly.

Video URL: http://www.youtube.com/watch?v=-DwmlE9JOhM

I await Chrysler's commercial.
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Unread 2011-05-26, 06:55 PM   #18
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Yeah, since the first time the govt bailed them out in the late 70's.

Ah how history repeats its self again.

They should have let the shitty car company finally die.
They did it to save jobs overall....Chrysler will be all but a shell in years to come w/ FIAT buying more and more of the co.
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Unread 2011-05-26, 09:01 PM   #19
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Originally Posted by e. View Post
GM did this, but went overboard on the making it public part. Even made a commercial having their CEO go on about how they paid it off.

Something went wrong. Please make sure you added the video correctly.

Video URL: http://www.youtube.com/watch?v=-DwmlE9JOhM

I await Chrysler's commercial.
Yep... That was stupid too. lol

I hope Chrysler doesn't make a commercial about it, but I guess it wouldn't surprise me.
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Unread 2011-05-26, 09:16 PM   #20
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Yes, and every GM nut hugger claimed that it was totally legit and it was in no way misleading.
Oh shit, don't let mrstage1 here you bad mouthin GM.
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Unread 2011-05-27, 07:14 AM   #21
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Unread 2011-05-31, 09:36 PM   #22
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Chrysler made a comeback in the 80's and bought out AMC (the company that made some of the ugliest and least reliable cars). Chrysler was going strong in the 90's and then Mercedes bought them and things kinda went downhill from there. Even with cars such as the 05 car of the year 300 and its twin the Charger couldnt save them.

Yes quality has always been a problem with Chrysler. For whatever reason they cant seem to shake that. And I dont see Fix It Again Tony helping much. Well that depends on who you ask these days. But its not the engine and transmissions thats been their problem as it is the rest of the car.

And thats been their main problem. Usually the drivetrain outlives the car.
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Unread 2011-05-31, 11:28 PM   #23
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Way to go Chrysler!

Built in the hood, FOR the hood.

(that should be their new motto with all the latest commercials they have)
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Unread 2011-05-31, 11:35 PM   #24
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Saw a couple new 300's today, the headlights don't go with the flow of the car at all IMO but overall it's not too shabby.
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Unread 2011-06-01, 07:50 AM   #25
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Saw a couple new 300's today, the headlights don't go with the flow of the car at all IMO but overall it's not too shabby.
wrong. it's amazing.
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