Chrysler Financial is first auto company to repay government loans
Filed under: Autos | By: Peter Chubb
Posted on: July 15, 2009 | 1 Comment
According to reports from Reuters, Chrysler Financial has become the first auto company in the U.S. to pay back its loan of $1.5 billion, which they had received from the U.S. Department of Treasury. The loan, which was taken out in January, was to help the company fund vehicle loans, as well as offer incentive programs to Chrysler customers.
Chrysler Financial, previously the lending arm of Chrysler received this loan as part of its bailout package, in the hope of providing incentives and consumer loans. Chrysler Financial now looks to GMAC to provide loans to finance inventory for Chrysler dealers.
These recent changes have left Chrysler Financial with a reduction in its scope of operations. The company, now owned by Cerberus Capital Management will continue to offer insurance to dealerships, as well as alternative financing for those who wish to purchase a new vehicle.
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Chrysler Financial paid back its TARP loan that placed earning restrictions on top executives with another government-based loan (TALF); it’s corporate welfare no matter how anyone looks at it. What the government should do is audit Chrysler Financial to determine whether the $1.5 billion TARP dollars were actually used for the intended purpose– to fund 85,000 consumer loans for the purchase of Chrysler vehicles. Who purchased 85,000 Chrysler vehicles from January through April of 2009? Chrysler Financial should be forced to name these consumers. Finally, if 85,000 consumers purchsed Chrysler vehicles, why did the company declare bankruptcy?
Cerberus and the government should allow our capitalist system to work and permit Chrysler Financial to go belly-up!!!!!