DETROIT — Chrysler Group LLC, newly profitable and confident in its revamped products, will soon sever its ties with the U.S. government after most – but not all – of the bailout loans it got two years ago are repaid.
Italian automaker Fiat SpA agreed late Thursday to buy the U.S. Treasury's 6 percent interest in Chrysler for $500 million. Once the deal closes, the government will no longer hold a stake in the auto company. Treasury officials said it could take up to three months to make sure the agreement meets regulatory approvals, but it will likely close more quickly than that.
The deal will give Fiat a majority 52 percent stake in the automaker, just two years after it agreed to manage Chrysler after its bankruptcy.
President Barack Obama is expected to announce the agreement Friday during a trip to a Chrysler facility in Toledo, Ohio.
The U.S. government will ultimately lose around $1.3 billion in the deal. The government authorized $12.5 billion in loans for Chrysler from the end of 2008 through Chrysler's bankruptcy filing in the summer of 2009. The Treasury Department said Thursday that Chrysler has repaid $11.2 billion – including $2 billion in undrawn loans – but it is unlikely to recover the rest. Government officials have long said that they didn't expect to recover the full amount they loaned to Chrysler and General Motors Co. during the auto industry downturn, and that their top priority was saving thousands of auto jobs.
"We didn't do this to maximize return. We did it to save jobs," Treasury Secretary Timothy Geithner said during a trip to Detroit in April. On Thursday, Geithner noted that GM and Chrysler are hiring again and making new investments at U.S. plants, which wouldn't have happened had they gone bankrupt.
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Democracy Gone Astray
Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.
All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.
[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]
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