Chrysler repays TARP loans six years early
The final payments made by the Chrysler Group to remove them from debt of the Federal Government included a $500 million dollar payment to the US Treasury Department for 98,461 shares of the company along with $60 million dollars paid to the United Auto Workers VEBA retirement trust fund. Now that Chrysler and parent company Fiat have removed themselves from the debt to the US taxpayers, they will not only stand to shed the dark cloud hanging over them by skeptics of the bailout loans of 2009, but it also allows the company to get out from under the high interest rates applies to said loans.
US Assistant Secretary for Financial Stability Tim Massad offered these comments on Chrysler paying off the TARP loans:
“With today's closing, the U.S. 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 U.S. auto industry."
Chrysler and Fiat made the first substantial move towards paying off the TARP loans in May with a payment of $5.1 million and all along, company CEO Sergio Marchionne has been vehement about paying off the debt that he once referred to as “shyster loans” due to their high interest rates. Marchionne quickly apologized for those comments but stuck to his guns that he wished to have the Chrysler Group out from under the watchful eye and controlling hand of the US government. Fiat was able to find other, lower interest financing and an impressive six years ahead of schedule, the Chrysler Group is officially no longer in debt to the US government and the American taxpayers.