Chrysler Gets $4 Billion Loan from U.S. Government
Chrysler LLC received a $4 billion loan from the U.S. Treasury Department last Friday; two days after its rival General Motors received a similar loan from the federal government.
Chrysler LLC received a $4 billion loan from the U.S. Treasury Department last Friday; two days after its rival General Motors received a similar loan from the federal government.
The emergency loan to the Auburn Hills, Mich.-based automaker “… will allow the company to continue an orderly restructuring …” said Chrysler chairman and CEO Bob Nardelli in a statement.
Last month, the government allocated a $6 billion loan to General Motors and its finance arm, GMAC Financial Services. The captive finance company immediately loosened its loan criteria to include retail financing for customers with a credit bureau score of 621 or above, a significant expansion of credit compared to the 700 minimum score put in place more than two months ago.
Officials did not explain why GM received the loan before Chrysler. However, Nardelli suggested that the complexity of the deals delayed the loan to Chrysler.
“We recognize the magnitude of the effort by the Treasury Department to complete the multiple financial arrangements and appreciate their confidence in Chrysler,” Nardelli said.
Chrysler is controlled by Cerberus Capital Management, which also owns 51 percent of GMAC.
The Bush administration approved in December a $17.4 billion bailout for the auto operations of GM and Chrysler.
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