Senator asks Obama to require Chrysler to payback loan if Fiat takes control

Posted: Jan 22, 2009
Filed under: Chrysler, Fiat, Industry News

Expect to see many more Chrysler/Fiat headlines within the next few days. Hot of the press is a new report that Democratic senator Robert Menendez is urging President Barack Obama to require Chrysler to repay its federal bailout money if Fiat takes a controlling stake of the U.S. automaker.

Menendez said in a later to Obama that American taxpayers should not be investing in a foreign automaker. So far, the U.S. Treasury Department has handed $4 billion in loans to Chrysler LLC and $1.5 billion to Chrysler Financial.

The Chrysler and Fiat partnership will give the Italian automaker 35 percent equity interest in Chrysler LLC; however, it will not make any cash investment in Chrysler or commit to fund it in the future. As a part of the deal, Chrysler will get access to Fiat’s fuel-efficient small car platforms and engines.

Chrysler was not available for comment.

Source: Reuters

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  • ottoau
    Dont be stupid, they SHOULD NOT pay it back.
    If they have to pay it back, Chrysler dies, THE DEAL ID OFF.

    The money is to be spent in USA then is no issue
  • neil
    Zermatt - you are right the whole thing is nationalization

    Just like the British government did with the car industry in England in the seventies.
    the unions were rampant and the quality was crap. now 30 years later there is NO mass production in England, except Indian owned Jag and LR and factories that make very high quality Honds'a, Nissan's and Toyota's without the big old unions getting in the way.

    Sound familiar
  • zermatt
    neil,

    Your observation is (as they say in the UK) spot on.

    I am afraid that the UAW will be allowed to make minor concessions (none to wages) and the greens will dictate product offerings. Chrysler will fail and GM will become a shadow of its former self.

    This is what will happen if market driven decision making isn't allowed to happen.
  • chris
    Ok...so we're discriminating against foreign companies now? What kind of capitalist society is that? Not sure if we're even a capitalist society anymore.
  • zermatt
    We are moving away from capitalism and more to nationalization.

    The loans that GM and Chrysler took had strings attached and future payments to these companies will have even more. Think of these strings as payback to the environmentalists and unions that brought the Democratic majority to Congress and POTUS.

    I can only hope that Ford remains strong and free of governmental control.
  • Pat
    i agree and these senators hardly know what's going on with the automotive industry anyway so making a call such as this is totally stupid on their part
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