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AutoBlog: Chrysler unlikely to pay back most recent $4.5 billion gov't loan

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Filed under: Government/Legal, Plants/Manufacturing, Chrysler, LLC., UAW/Unions

chrysler-logo_250.jpgRepayment of the $4.5 billion life-line in U.S. and Canadian loans that a federal bankruptcy court allowed yesterday is "highly unlikely," according to Ron Manzo, a top company adviser. To Chrysler's bankruptcy legal team, that is not the issue. Urging the court "to let this company live," automaker attorney Corinne Ball said "the survival of Chrysler's business is at stake in these proceedings, as is the fate of hundreds of suppliers and thousands of Chrysler dealers around the country."

In other related developments:
  • Chrysler's salaried employees will be ordered to take a two-week unpaid furlough saving the company $21 million. Hourly workers are already on furlough.
  • Incentive plans to dealers will be cut by 25 percent in May, and 50 percent in June.
  • Chrysler is losing 30-40 dealerships per month. They now have fewer than 3,200.
  • In papers filed last week, Chrysler expects the U.S. Treasury to forgive the $4 billion loan made in January.
  • The company's biggest obstacle to making a speedy exit from bankruptcy court are the dissident creditors, holding $6.9 billion in first-lien debt.
[source: The Detroit News]

Chrysler unlikely to pay back most recent $4.5 billion gov't loan originally appeared on Autoblog on Tue, 05 May 2009 18:39:00 EST. Please see our terms for use of feeds.

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I have a feeling this will greatly increase Chrysler's disapproval ratings.

Yea I doubt the public will like this...

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I don't care, the government owes it to them anyway. Just wish they didn't have to use our money. The government owes all of the Big 3 for letting in unfair foreign trade. If they could have kept American cars more competitive with Asian cars, then none of this would have happened. It's the price the government pays for wanting global "free trade", but also wanting to actually produce things in your own country.

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