The Washington Post reports that Chrysler Financial turned down $750 million worth of federal loans to avoid executive pay limits. Surprised? Me neither. And that’s not a whole lot of money in the grand scheme of things ($1.5 billion already “loaned” to Chrysler Financial, $6 billion for GMAC, $7 billion for Chrysler, $17.4 billion for GM, $5.5 billion for suppliers). Anyway, the WaPo sure has its dander up. “In forgoing the loan, Chrysler Financial opted to use more expensive financing from private banks, adding to the burdens of the already fragile automaker and its financing company . . . The company’s decision comes amid a firestorm on Capitol Hill and elsewhere over the lavish pay of executives at companies being aided by government money. The uproar has made companies skittish about taking federal aid and hindered the Obama administration’s effort to revive lending by replenishing the coffers of the nation’s financial firms.” Ah. OK. So, NOT accepting federal support is bad. Welcome to Bailout Nation. And its media dupes, like Autoblog, who called ChryCo execs’ explanation (after the jump) “disingenuous.” Folks, the LESS taxpayer-funding in the US auto industry, the better. Period.
“Chrysler Financial has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such no additional TARP funding is necessary at this time,” the company said in its statement.
That is pretty cool. I wanna see how they go forward and how the public responds/reacts.
GM is my favorite US manufacturer (with Porsche being my favorite import — an engineer’s car). But Ford and perhaps even Chrysler is well on their way to displacing GM, simply because Ford took zero bailout money, and Chrysler is seeing the light.
I would assume not everyone has this view of how this is shaping up, but I think Ford is doing the right thing, and on the other side, they may even end up ruling the American manufacturers if they can draw attention to their stance, and get people to buy into free market economics again.
WIth GM imploding and Chrysler struggling, Ford went their shape-up period a year or two before GM and Chrysler did.
Hoooooo-Boy won’t the Feds and the Washington Post anti-car-crowd be pissy if Chrysler-FIAT Financial borrows money ‘privately’ to payoff the TARP loans from banks that are ostensibly loaning them-wait for it-TARP money…That would certain get some DC undies in a bunch. Maybe Chrysler Financial could deliver the loan payoff by flying into DC on their corporate jet.
Stu, that would make me smile from ear to ear, for months :)
What do they need money for. they won’t have anything to finance come month end.
@Robert Schwartz: I keep seeing the “Employee Pricing Plus Plus Plus Plus Really Plus” commercials on television where they announce “[this promotion] is in its final month!” I keep thinking it’s not the final month of the promotion, it’s the final month of Chrysler’s existence.
I’d like to hear more about the “private banks” that think lending C7hrysler any money at all is a good use of their funds. Did they need investment losses for tax purposes?
Of course they don’t want TARP money that would limit there bonuses since it’s the last one’s they’ll ever see (if they ever do see them in liquidation).
What I want to know about are all the families who have been, and may soon be, on assistance because of all the intrusions into the labor market in Michigan. Oh, I guess we will never here about that in the news.