Monday, May 17, 2010

The Third Wheel

Even in its government-owned, bailed out form, Chrysler is still the afterthought among the Big Three. While the government happily goes along with the Enron-accounting that allowed GM to claim implausibly that it had paid back its debt to the feds "in full," Chrysler is simply reported as a billion dollar loss: Treasury Takes $1.6 Billion Dollar Loss On Chrysler Loan

The Treasury Department said Monday it will lose $1.6 billion on a loan made to Chrysler in early 2009.

Taxpayer losses from bailing out Chrysler and General Motors are expected to rise as high as $34 billion, congressional auditors have said.

Treasury said Monday that Chrysler repaid $1.9 billion of a $4 billion loan, which was extended before the company filed for Chapter 11. The government hopes to get another $500 million from the company that emerged from bankruptcy, Chrysler Group LLC.

Treasury officials said that the government had no plans to boost its stake in the new Chrysler to cover those losses. It also acknowledged another $1.9 billion in potential losses from a separate loan that had been made to the company that went through bankruptcy proceedings. It indicated slim hopes of recouping much if anything from that separate $1.9 billion loan.

The original $4 loan was made in January 2009, when the Bush administration was scrambling to rescue Chrysler, GM and their auto financing arms.

The Congressional Budget Office estimated in March that the government's $85 billion bailout of the automakers would cost taxpayers $34 billion.

FWIW, I saw someone driving a Fiat 500 past City Hall the other day. It looked ... cute. Not cute enough to buy, of course, but I'd like to think there are enough gay men and swinging single chicks in the United States to make it a profitable car whenever it is that Chrysler starts selling them out here.

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