Chrysler repays $5.1 billion in TARP loansMay 25th, 2011 - 1:43 am ICT by BNO News
WASHINGTON D.C. (BNO NEWS) — The U.S. Department of the Treasury on Tuesday announced that Chrysler Group LLC repaid $5.1 billion of its outstanding Troubled Asset Relief Program (TARP) loans.
Chrysler repaid $5.1 billion in TARP loans and terminated its ability to draw a remaining $2.1 billion TARP loan commitment. Overall, the Treasury Department has received $1.5 billion in interest and fees from Chrysler, including $865 million this day.
“Chrysler’s early repayment of its outstanding TARP loans is an important step in the turnaround of this company and the resurgence of the auto industry,” said Treasury Secretary Tim Geithner.
Chrysler repayment came six years before he scheduled maturity of its TARP loans in 2017. Treasury committed a total of $12.5 billion to Chrysler under TARP’s Automotive Industry Financing Program (AIFP).
“This announcement comes six years ahead of schedule and just two years after emerging from bankruptcy, allowing Chrysler to build on its progress and continue to grow as the economy recovers,” said U.S. President Barack Obama.
So far, Chrysler has returned more than $10.6 billion of that amount to taxpayers through principal repayments, interest, and cancelled commitments. The Treasury Department continues to hold a 6.6 percent common equity stake in Chrysler.
However, it is unlikely that the Treasury Department will recover its remaining outstanding investment of $1.9 billion in Chrysler. The 2009 TARP support to the U.S. auto industry was necessary to save General Motors and Chrysler.
President Obama decided to provide support to GM and Chrysler on the condition that all stakeholders make the sacrifices necessary to fundamentally restructure those companies and put them on a path to viability. This action saved the collapse of the American auto industry as well as more than 1 million jobs.
“Because President Obama made the tough decision to stand behind and restructure the auto industry, America’s automakers are growing stronger, making new investments, and creating new jobs today throughout our nation’s industrial heartland,” added Geithner.
For the first time since 2004, all three American automakers have an operating profit this year. Since GM and Chrysler emerged from bankruptcy in June 2009, the industry has added more than 115,000 jobs.
“While there is more work to be done, we are starting to see stronger sales, additional shifts at plants and signs of strength in the auto industry and our economy, a true testament to the resolve and determination of American workers across the nation,” Obama concluded.
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Tags: american auto industry, automaker, automotive industry, barack obama, bno, chrysler group, chrysler president, department of the treasury, equity stake, financing program, loan commitment, principal repayments, resurgence, tarp, tim geithner, treasury department, treasury secretary, u s auto, u s department, viability