Troubled automaker Chrysler wants to pay back loans from the Canadian and U.S. governments that helped it survive during the recession, said the company’s CEO in Brampton.
BRAMPTON, Ont.—Troubled automaker Chrysler wants to pay back loans from the Canadian and U.S. governments that helped it survive during the recession, said the company’s CEO in Brampton.
“I’d like to pay them off in 2011, if I could,” said CEO Sergio Marchionne after a product launch. “I would like to get it done as quickly as I could.”
Marchionne said assistance from the Ontario, Canadian and U.S. governments was key to the company’s survival, giving the automaker an opportunity to create a future.
The federal and Ontario governments loaned Chrysler $250 million in March 2009 to meet payroll and other urgent financial commitments. To restructure its business, the automaker was given approximately $3 billion after it filed for bankruptcy protection in spring 2009.
Chrysler is currently paying Canadian and U.S taxpayers interest exceeding $1 billion. Marchionne said the company wants to refinance a portion of the $6.9 billion it owes Canadian and U.S. governments to save on long-term interest costs.
“From an investment standpoint, from a Canadian government standpoint, once it gets repaid it was the best investment it ever made,” he said.
Chrysler said it has invested more than US$1 billion since 2008 to launch revamped models of the Chrysler 300, Dodge Charger, and Dodge Challenger. The launch of these vehicles highlights the company’s recovery since emerging from bankruptcy protection, said Marchionne.
The Brampton plant, where nearly 2,900 people work on two shifts, has been a source of speculation since the company emerged from U.S. bankruptcy protection after announcing its partnership with Italian automaker, Fiat. The plant currently has an additional 800 employees on layoff. It is, however, rumored to begin production of Fiat’s Lancia-brand luxury vehicles in 2012.
Marcionne said that the Chrysler-Fiat partnership should produce about six million cars annually by 2014, generating US$86.3 billion in revenues.
Chrysler currently has another production plant in Windsor and a casting plant in Toronto. The company employs about 7,500 Canadians.