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Fiat has run Chrysler since the American automaker emerged from bankruptcy protection in June 2009. The U.S government provided a total of $12.5 billion to Chrysler with the funds coming from the government’s $700 billion bank bailout fund. $11.2 billion has been repaid to the Treasury and Chrysler repaid $5.1 billion in loans from the government in May. The Treasury has stated that it likely won’t recover the remaining $1.3 billion. With Fiat’s payment to the government, the Italian automaker now has 52 percent ownership of Chrysler. Fiat will likely own 57 percent of Chrysler before the end of 2011 when Chrysler begins producing a 40 mpg small car in the U.S.
U.S. Assistant Secretary for Financial Stability Tim Massad released this statement: “With today’s closing, the US government has exited its investment in Chrysler at least six years earlier than expected. This is a major accomplishment and further evidence of the success of the Administration’s actions to assist the US auto industry, which helped save a million jobs during the worst economic crisis since the Great Depression.”
[Source: Washington Post]
General Motors CEO Dan Akerson is looking forward to the day when he can relax on his yacht, sipping Mai Tais on the deck…and knowing full well that the federal government has finally sold its stake in GM, and has completely divulged itself from the company as it did with Chrysler.
But it’s still a long way until the government can recoup its shares from taxpayers, acknowledged Akerson. GM has technically already repaid its debt to the Treasury Department: the $50 billion it received in 2009 came in the form of equity stakes, which were held by the Department. But according to a recent report by the White House National Economic Council, the government will have to write off about $14 billion of the $80 billion total bailout—money that was supplied by taxpaying Americans.
GM’s executives are “doing our level best” to recover this amount, said Akerson. The company has made five consecutive quarterly profits and managed to earn $4.7 billion last year, and if things go well the Treasury can sell its shares as soon as August.
[Source: New York Times]