Filed under: Government/Legal, Chrysler, Earnings/Financials, Fiat
It’s Official: Chrysler has announced that it has repaid its multi-billion dollar obligations owed to both the United States and Canadian governments. Adding up both loans plus interest, Chrysler has just shelled out a tidy $7.6 billion. The U.S. receives $5.9 billion and Canada will get $1.7 billion.
Chrysler was able to secure new means of financing, which allows the automaker to pay off its government obligations a full six years ahead of the original payment schedule. While this new financing still involves debts, it saves Chrysler an estimated $350 million per year in interest. This move also allows Chrysler to remain liquid, with more than $10 billion in assets ready to roll.
Under the direction of the U.S. government, Chrysler partnered up with Fiat, and the goal was to bring smaller, more fuel-efficient vehicles to the states. Yet as an opinion piece in The Detroit News sagely reminds us, it wasn’t really the smaller cars that helped Chrysler, but the newly refreshed sport utility vehicles. The all-new Dodge Durango and Jeep Grand Cherokee models helped push sales up 17 percent in 2010.
Regardless of how they got there, this move should serve to instill confidence in the U.S. car-buying public. Chrysler continues to add new or redesigned vehicles to its lineup and has a strong media campaign behind those vehicles. Will high gas prices slow the positive momentum that Chrysler has built up, or is this the chance for the Fiat portion of the relationship to step up and shine? Sound off in Comments, and check out the full press release posted after the jump.
Continue reading Chrysler repays the rest of its federal loans… are SUVs to thank?
Chrysler repays the rest of its federal loans… are SUVs to thank? originally appeared on Autoblog on Tue, 24 May 2011 13:55:00 EST. Please see our terms for use of feeds.
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