Chrysler today paid back $5.9 billion it had borrowed from the U.S. government, along with another $1.7 billion due to the governments of Ontario and Canada. No, Chrysler isn’t suddenly flush from selling cars. The money to pay back the governments comes from bonds the automaker sold to banks and private investors last week.
Chrysler borrowed $12.5 billion under the Toxic Asset Relief Program (TARP) after filing for bankruptcy in April 2009. Chrysler and Fiat CEO Sergio Marchionne said in a statement that returning the money was an important step for the automaker’s future:
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. … 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.
[In a statement, President Obama said:]
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.
Even after today’s payments, the U.S. government still owns 6.6% of the troubled car-maker. Italian auto manufacturer Fiat, which took control of Chrysler after its bankruptcy, will increase its stake to 46%.
Chrysler repays government loans [Detroit Free Press]