Chrysler Says It Won't Pay U.S. (Us) Back If you're keeping a list of who's been naughty or nice, you might want to sharpen your pencil for Chrysler and GM. In a special message of holiday cheer, Chrysler announced through filings last week that its pre-bankruptcy self doesn't appear to want to make good on its $3.7 billion loan from U.S. taxpayers. The money went to the old Chrysler (now called, officially, the "OldCar Co") through the Troubled Asset Relief Program (TARP) in April of 2009 when the company announced its "fast track" Chapter 11 bankruptcy. Counter that against the letter then-CEO Bob Nardelli wrote to stakeholders before the money came through: "Our viability plan demonstrates that Chrysler will repay the U.S. government loans in full, with a premium beginning in 2012," Nardelli wrote. "As we have indicated all along, shared sacrifice is necessary for Chrysler's survival." Nardelli, long gone, doesn't have to answer why, but we hope he blushes when he looks at himself in the mirror in the morning. The announcement also appears to fly in the face of TARP's marching orders, which counted recoupment as a major factor in its passage through Congress. The thinking was that no TARP funds would ever add to the national debt. At least from what we've heard from Chrysler, that doesn't appear to be the case.
Maybe that is not all bad. Congress has diverted other loan repayments and squanders it on graft, corruption and political favors.
Don't worry. Karma will catch up with Chrysler. Its just a matter of time now. If the gas prices spike like they did in 2008, Chrysler will be history. I don't think Fiat designed products are going to be popular with North American customers; they weren't 30 years ago.
Unless TARP is a special case, when a person or company files for bankruptcy, GOVERNMENT debts are not erased. If you owe huge sums of money to private entities and you owe back taxes and government loans, and you file for bankruptcy, everything is erased BUT NOT government back taxes and loans. Is the TARP program "special" or something ????
I have always hated Chrysler products. This is just one more reason to hate Chrysler. From being the only car company without a 5-star safety vehicle to being gas guzzlers and poor quality vehicles, we car start digging their grave now. The previous poster was right about Karma.:rockon:
I'm pretty sure the "OldCar Co" is the Cerberus owned company. Personally, I think it would be a good thing to bring Cerberus 'back to the table.' As near as I can tell Cerberus is just another corporate dismantler that works on the principle of borrowing money to buy a company and then selling off the pieces ... often to other dismantlers. I suspect Cerberus got 'caught'. They are trying to evade responsibility and leave Chrysler with 'the bill.' As for whether or not Chyrsler should continue as a car manufacturer, I have no great love lost for them. They worked hard to get where they are today and still lack imagination beyond the PowerPoints they issued earlier this year and late last year. Bob Wilson
Yes, back in the 80's, they were known as LBO (leveraged buyout) firms. Now they are known as Private Equity firms but they work the same way. I don't understand why Chrysler qualified for TARP funds when they were privately owned. I suppose they (the gov't) didn't want to lose the Chrysler jobs. They were just delaying the inevitable. If the gov't wants to stop the loss of jobs, they need to start regulating the Private Equity / Leveraged Buyouts to keep these greedy a-holes from destroying productive companies. Joshua Kosman, Predicting The Next Credit Crisis : NPR Cerberus Drags Private Equity Firms into Spotlight : NPR
The simplest way to discorage this is the future is to not award Chrysler any government fleet sales until it is paid back. I am betting fleet sales is all that keeps them afloat, no individual would choose a Chrysler product if there were other alternatives.
I wouldn't buy any US car. The last time I had a US car was in 1976 and traded it for a honda. I hope everybody stops buying Chrylers until the pay us back.
The figures may have changed over the last 2 years but prior to that chrysler had less than 5% of all fleet sales in the nation. Ford owns the fleet sale market in the US
At least in Pa. if you see a new Dodge Avenger it has Pa. goverment plates and it seems all the Police Depts. are switching to dodge Charger's since Ford quit making the Crown Vic. Why did Ford quit making the Crown Vic. when they had the Taxi cab and Police market pretty much to themselves.
I might consider a Ford *if* I needed and could easily afford a 2nd new car. I see Ford as the best of the three, but I had a strange encounter with a longtime Ford employee, a rep at an auto show who was a Ford engineer for years. He claimed a Ford Escort emits less pollution per mile than a Prius. And he also claimed that 4-door hatchbacks are inherently unsafe because they will crush if hit in the rear quarter panel, and that Ford does not like to build cars with that format. He claimed that sedans are the safer format for small-mid cars. O.K?
Many think Ford's increase in market share were former GM and Chrysler customers hissed they took TARP money....this bad PR might cost Chrysler more than it saves. Pity - I wanted to see them crank out this...
Ford still makes the Crown Vic and police interceptor. The difference is they are available to the fleet sales market only since 08. The chargers are gaining popularity because you can fully outfit one for under 20k at the moment. However many departments in my area that have bought them Have a love hate relationship with them. They say they are great cars but as far as arrest transports they prefer the crown vic. Once you put the cage/divider in the charger there is zero room in the back seat
That's why Ford has just announced that it will recall all Focus ZX5's and buy them back from their owners at the original purchase price. Yeah, right.
