8.24 p.m. Chrysler ‘ pays back ‘ $1.7 billion to Canada six years early …

Sergio Marchionne must have felt a little like Lee Iacocca on Tuesday after Chrysler Group paid back $1.7 billion in loans and interest to the federal and Ontario governments and another $5.9 billion to the U.S. Treasury.

A beaming Marchionne, chief executive of Chrysler Group , announced the automaker had repaid the money to the governments more than six years ahead of the original schedule under terms of the 2009 loans that saved the automaker.

In July, 1983, Iacocca had a similar experience as chief executive at booming Chrysler. He announced the payback of $813,487,500 in government backed loans to a group of bankers – seven years before they were due.

Marchionne , who grew up in Toronto , said in a statement that the company made a commitment to repay Canadian and U.S. taxpayers two years ago and “ we made good on our promise ” …

Marchionne has worked to refinance the loans with other lenders at more attractive terms to help spark the company’s recovery. The company expects to save about $350 million annually in interest costs.

In Canada’s case, Chrysler was paying annual interest of about seven per cent. Ottawa received about $12 million in interest in the 2010-2011 period while Ontario Finance Minister Dwight Duncan confirmed the province gained about $6 million.

However the repayment means Canada’s equity interest will drop from 2.15 per cent to 1.66 per cent. Chrysler’s parent Fiat SpA of Italy had a deal where it could increase its stake in the company by 16 per cent which will dilute the interests of other shareholders.

Chrysler almost collapsed during the 2008-2009 economic downturn which would have eliminated thousands of jobs in Ontario where the company operates two major assembly plants and parts operations.

However the company has returned to profitability with strong worldwide sales. It posted a profit in the first quarter for the first time since exiting bankruptcy court protection under control of Fiat which Marchionne also heads …

Ok folks !!! … Before the back patting and high fives start … Let’s just point out two important things here …

1 ) Chrysler has only paid back a little over a billion ( 1.3 … From what I can ascertain from conflicting reports ) from profits ( by .. LO AND BEHOLD !! … Actually running the company properly and having the over paid workers taking pay cuts from their ridiculous union acquired wages ! ) of the close to EIGHT BILLION ! the taxpayers had no say in to the government’s choice to ‘ bail it out ‘ … The rest has simply just been refinanced to the private sector … CHRYSLER IS STILL IN DEBT AND A COMPANY THAT CAN’T COMPETE WITH THE EUROPEAN AND JAPANESE CAR MANUFACTURERS !!! …

The fact that their ‘ parent company ‘ is FIAT ! should pretty well sum things up ! …

2 ) It took decades of living off the laurels of ‘ how many Americans you employ ‘ , therefore gouging the consumer and convincing the government that you NEED to survive , that got you in this predicament … And forced the spotlight on ya !!! …

Until your Executive Officers start receiving compensation based on profit , your employees get paid a wage befitting that of an unskilled robot and your product is priced in conjunction to the quality you put out … Don’t expect any applause from me !!! …

via Chrysler pays back $1.7 billion to Canada six years early – thestar.com.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s