Chrysler Group Pays Back Gov't Loans; Marchionne Calls Day "Major Milestone"
It's a day 23 months in the making, six years ahead of schedule, and a day during which Chrysler Group CEO Sergio Marchionne spoke both praise and caution.
And, the highlight transpired at 10:13 a.m. when Marchionne received confirmation from Citigroup that company's wire and bank transfer of payments to the U.S., Canada and Ontario governments were received and Chrysler Group's $6.7 billion loan was paid in full, with interest.
Marchionne spoke to Chrysler Group employees at the company's headquarters at noon, and then headed to the Sterling Heights (MI) Assembly Plant for the 2 p.m. public portion of what he called the company's "Independence Day."
He was joined there by Assistant to President Obama for Manufacturing Policy Ron Bloom, and Vice President and Director, UAW Chrysler Department General Holiefield. Senior Vice President and Head of Manufacturing Scott Garberding made opening remarks.
During his comments, Marchionne said the "joy" of June 10, 2009, when the loan were made, "was conditioned by the sense of responsibility we all shared.
"Not just for the privilege we had been given of helping get an American icon back on its feet, but more importantly for our moral obligation to justify the support that American and Canadian taxpayers had given us.
"We knew we had to live up to the expectations of those who had made sacrifices on our behalf."
As he has done so in the past, Marchionne cautioned about celebrating too much:
"Today is a major milestone for Chrysler Group, but our work is by no means finished....
"Repayment of the government loans closes an important chapter in our history, but we still have a great deal left to accomplish before regaining our rightful place in the automotive landscape."
ChryslerPayback facts:
Chrysler Group made final payments Tuesday of $7.6 billion for the outstanding loans from U.S. and Canadian taxpayers (via their respective governments).
Payments consisted of $5.9 billion to the U.S. Treasury and $1.7 billion to Export Development Canada
In total, Chrysler Group paid U.S. Treasury $6.5 billion and the Export Development Canada $2.0 billion, including interest and additional consideration
Total loan pay off was $6.7 billion plus $1.8 billion of interest and other considerations. That's a loan + interest totalling $8.5 billion.
U.S. and Canada governments made $1.8 billion on the deal
Paid in full more than six years ahead of payment schedule
Loans by U.S. and Canadian governments combined with strategic alliance with Fiat leads to:
16 all-new or significantly refreshed vehicles currently in dealerships;
more than $3 billion in facility upgrades; and
increased employment with the hiring of 6,000 Chrysler Group employees
The new financing will save Chrysler Group an estimated $350 million a year in interest expenses.
In June 2009, Chrysler Group borrowed $5.1 billion from the U.S. Treasury and $1.6 billion from Export Development Canada.
$2.6 billion from the original loan facilities was undrawn and the facilities will be cancelled