News Column

Chrysler CEO Hails 'Payoff Day' for Government Loans

May 23, 2011

Brent Snavely


Less than two years after emerging from Chapter 11 bankruptcy, Chrysler is poised to pay off its government debt, Chrysler Group LLC and Fiat SpA CEO Sergio Marchionne said Monday.

"Tomorrow is payoff day," Marchionne said Monday at a grand opening celebration at Fiat of Lakeside in Macomb Township, Mich.

After raising $7.5 billion from bond investors and major banks in a deal announced last week, Chrysler plans to wire the money it owes the government on Tuesday and has scheduled a celebration event for the afternoon with Obama administration officials. Chrysler owes $5.8 billion to the U.S. Treasury and $1.7 billion to Canada and Ontario.

"It is our expectation tomorrow that Chrysler will again regain its independence and its accountability to the capital markets," Marchionne said.

Marchionne said Chrysler should be able to save about $300 million per year from lower interest rates from its new financing with banks and bondholders because the interest rates are lower.

Earlier Monday, Chrysler said Ron Bloom, who served as key member of President Barack Obama's automotive task force, will be at Chrysler's Sterling Heights (Mich.) Assembly Plant Tuesday afternoon along with Brian Deese, deputy director of the National Economic Council. Both Bloom, who is now the assistant to Obama for manufacturing policy, and Deese were key members of Obama's automotive task force which oversaw the quick bankruptcy reorganizations of Chrysler and General Motors Co. in 2009.

Source: (c) 2011, Detroit Free Press. Distributed by Mclatchy-Tribune News Service.

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