By on September 15, 2011

Reuters reports:

Republican leaders in the House of Representatives want to halve the balance of a U.S. government loan fund established to help the auto industry make more fuel efficient cars and trucks.

If plans to shift some $1.5 billion from the Energy Department advanced technology fund to disaster assistance are carried out, serious questions would be raised about Chrysler’s ability to fully capitalize on its bid for new financing.

That the DOE loan program is under attack comes as no surprise: it’s been savaged by both the GAO (twice) and the Center for Public Integrity for a lack of clear goals, weak oversight, misappropriation, and political patronage (more on the patronage bit here). And with the Solyndra DOE loan scandal blossoming, it’s no surprise to see ATVM going under the axe (although Rep Steny Hoyer is leading the Democrat pushback). What’s worrying about this development, however, is that Fiat-Chrysler CEO Sergio Marchionne has said that the DOE loan was “a crucial part” of negotiations over its recent Wall Street bailout loan refinancing. When GM quit the program earlier this year, Marchionne also said that

I have neither the arrogance nor the cash to show any disdain toward the DOE process.

Chrysler also cites its ability to secure the DOE loans as a major risk factor in its latest 10-Q SEC filing. And with only about $10.2b in cash and equivalents on hand at the end of June, there’s a chance that this attack on the ATVM loan program could deal a body blow to Chrysler’s finances. Here’s hoping Sergio has kept the runt of the bailed-out automaker litter from dependence on this apparently corrupt, and politically vulnerable loan program.

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12 Comments on “DOE “Green Car Retooling” Loan Program Under Republican Assault, Are Chrysler’s Finances At Risk?...”


  • avatar
    CJinSD

    Hands out for more taxpayer money? This process will never stop unless we let these crony corporations sink or swim on their own. Republicans would be wise to let the graft stop so the Democrats can’t keep buying votes. The closed loop political corruption between organized labor and the DNC won’t work if the Republicans turn off the tap.

    • 0 avatar
      highdesertcat

      These handouts started under Shrub and continued to the nth degree when Obama came into office. We have no one to blame but ourselves for putting these politicians in office who vote to subsidize commercial enterprise at the expense of the taxpayer.

      Green car retooling is a myth. If people wanted green cars then the F150 and the Camry would not be the number one sellers in America.

      But we do have a choice in what we buy. What we choose to buy is a vote for what we support and anyone can read the monthly and annual sales reports. Green is not even an also-ran.

      These green retooling loans are a scam. Just another handout under a different name. All perpetrated in the name of the taxpayers who want none of it.

      • 0 avatar
        CJinSD

        I wasn’t old enough to vote for Reagan, so I’ve never had the choice of voting for someone whose policies and convictions I supported. I wasn’t buying cars before progressive Nixon’s CAFE was enacted, so I’ve never had the option of voting with my checkbook. Something drastic needs to be done to eradicate the barriers erected to freedom.

      • 0 avatar
        highdesertcat

        All politics is local. Vote for the candidates that best reflect your views. And when it comes to actually spending your own bucks on wheels, buy what best reflects your beliefs and what you support; i.e UAW-made, or not; government subsidized, or not; made in the USA, or not.

        I’m not pushing any brands or manufacturers but we still have a choice when it comes to where we lay down our money.

        I started life as a Democrat, being born into a Democrat Union-member family, then became a Republican when I got my first job and had to pay real money in the form of taxes, and eventually progressed to be an Independent, voting for the best candidate.

        Decide what you believe in, vote accordingly and buy goods that support your conviction. You still have freedom of choice. Use it to your best advantage.

      • 0 avatar
        Pch101

        I wasn’t old enough to vote for Reagan, so I’ve never had the choice of voting for someone whose policies and convictions I supported

        Which of his policies did you prefer: the quotas on imported Japanese cars, or the change in safety regulations that killed off grey market imports of European cars?

  • avatar
    jhott997

    If the fate of Chrysler as a corporation depends on these loans (which very well may be the fact…) then Chrysler SHOULD NOT get any loan.
    A “loan” or grant of this type should be used to support individual and specific programs, not to keep entire corporations afloat.
    Generally, there is and has been SO much wrong with all the intervention in the auto industry that has occurred since 2008, it disgusts me.

    • 0 avatar
      highdesertcat

      Chrysler, as a corporation, no longer exists. Chrysler as a subsidiary of Fiat is the new norm. And as such, we, the people, should not be giving ‘loans’ of any kind to a foreign company that we had to bribe for $1.3B to take Chrysler off our hands.

      • 0 avatar
        Scoutdude

        I agree, they were already paid to take the company off our hands so we should not be increasing the amount of the “loans”. GM opted out of their allotment and that amount should not have been added to “Chrysler”‘s.

  • avatar
    Austin Greene

    Who’s that plumper standing next to Marchionne?

    Finally something from Fiat-Chrysler that I’d like to merge with.

  • avatar
    Advo

    So what in America is subsidized?

    Employer subsidized health care is the biggest. Mortgage tax write-offs is next.

    All those sports stadiums built with public money for the benefit very wealthy owners and players is prominent. Expensive sports tickets and luxury boxes look like excessive costs of doing business. Tax breaks for land developers or businesses like automobile assembly plants come to mind. Even charitable donation tax-breaks are subsidies.

    So all of this is distorting what people truly would want, need, and buy with their money if it wasn’t being influenced by all this. And distortions mean less efficiency, lower wealth generation and growth, and a poorer overall economy than what would otherwise be.

    How much of these do you want to keep?

  • avatar

    Now that Chrysler is Italian shouldn’t they follow the lead of their political leaders and have their hat out grovelling to the Germans?


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