Just like the U.S. government, the Canadian government has sold its shares of Chrysler stock to Fiat, at a loss.
Canada bailed out Chrysler’s operations in Canada, and it cost the Canadian taxpayers $810 million.
Canadian autoworkers union officials say their government should have held on to the stock a little longer, as a way of making sure Chrysler/Fiat doesn’t shut down the Canadian operations: “We’ve advocated all along for the Ontario and Canadian governments to retain those shares as leverage, to retain investment in Canada, but that decision wasn’t made and now we have to trust that Chrysler and Fiat will recognize the incredible contributions Canadian workers, and Canadian plants, have made in the turnaround of this company.”-Ken Lewenza, union rep
So what about all the noise about Chrysler supposedly paying off its bailout loan? In the end the U.S. taxpayers lost $1.3 billion.
The pay off was in the form of stock buy back. The United States government sold its remaining shares of Chrysler stock to Fiat. The result was a net loss for U.S. taxpayers. The U.S. Department of Treasury called it a “major accomplishment”!
Maybe if the federal government wasn’t so busy bailing out banks and corporations (along with its increasing war budget) it wouldn’t be in so much financial trouble right now.
“This was not a normal case. The government was deciding who was going to be taken care of and who was not.”-David Skeel, University of Pennsylvania Law School
The recent bailout of General Motors and Chrysler, did not just include money, it included legal liability for defective vehicles that caused injuries and deaths.
The bailout allowed GM and Chrysler to skip paying any court ordered settlements for injuries or deaths that happened before the auto makers went bankrupt. GM had 2,500 claims against it when they went bankrupt. The excused settlements are in the tens of millions of dollars.
In the words of Telly Savalis: “Who loves ya baby?” It’s not your government that’s for sure.
The U.S. media is talking about Chrysler’s announcement that it plans to pay off the U.S. and Canadian government loans. It is not a sign of a good economy, because the loans are not being paid off with profits.
Chrysler’s pay off is coming as a result of more loans. The Auto maker has decided that it does not want to keep paying the high interest rate of the government bailout loans, so it has refinanced through private banks. In other words Chrysler is still in trouble.
Chrysler announced that it will pay back the U.S. and Canadian governments (taxpayers), but not because of increased profits.
Chrysler is trying to get money from private lenders, in order to pay back the government loans. This is a sign that Chrysler doesn’t think it can pay back the taxpayers, based on its sales/profits.
Also, Chrysler is hoping the private loans will be at lower interest rates, than what it’s paying to the governments. The interest rate for the U.S. loans are between 7%-14%, and the Canadians up to 20%. Gee looks like they didn’t get a deal, like most corporations. Is it because Chrysler is owned by a foreign company?
Thanks to the ongoing nuclear power plant disaster in Japan, Chrysler is now limiting color options on their cars.
Ford already announced the unavailability of Tuxedo Black, and three shades of red. They rely on pigments from Japan.
Chrysler is also doing the same thing, except they haven’t specified which colors are going to be affected, only that it will affect ten color options.