Chrysler Withdraws Application for D.O.E Loan

Chrysler Withdraws Application for D.O.E Loan

Chrysler has announced the withdrawal of its Advanced Technology Vehicles Manufacturing (ATVM) loan from the U.S. Department of Energy.

A loan signed in 2007 by former President George W. Bush, the ATVM program was designed to provide financial aid to companies to pursue development of advanced, high-mileage power train technologies in order to reduce dependence on foreign oil.

Chrysler first applied for this federal loan shortly after it restructured from its 2009 bankruptcy. Initially a $7 billion proposal, distribution of ATVM loans have critically stalled as politicians argue about the program.

It seems that Chrysler is tired of waiting, having applied more than two year ago. Sergio Marchionne was outspoken of his displeasure. When Chrysler made the decision to withdraw, the ATVM had already cut its loan proposal to a figure of $3.5 billion, half of what Chrysler initially desired.

“Why am I bothering if the loan was going to be either rejected or sharply reduced,” he said.

Despite Marchionne’s disappointment does not, however, mean the company will abandon eco-friendly technology. In fact, Chrysler laid plans to fund its own research and development for hybrids, plug-ins and other advanced technologies.

“The company remains confident in its strategy to bring competitive, fuel-efficient vehicles and technologies to market on schedule. This decision will not impact Chrysler’s ability to achieve its previously announced business plan targets.”

“I am disappointed that Chrysler withdrew its Section 136 application. I regret that the DOE and Chrysler were not able to come to an agreement that clearly would have benefitted American workers and manufacturers,” said U.S. Representative John Dingell.

Dingell took notice of Chrysler’s strong performance in 2011 and it’s sales figures that improved better than the industry average. Chrysler has also repaid its U.S. and Canadian loans in full and even created 9,400 new jobs. Simply, John Dingell believed that Chrysler “would have been a perfect candidate for the loan program.”

Finally, Dingell said, “Although Chrysler has withdrawn its loan application, DOE must start acting decisively so we can fulfill the President’s goal of out-competing the rest of the world.”

[Source: The Detroit Bureau]