Chrysler has received a US$4bn loan from the US government, days after larger rival General Motors also received help to get it through the current financial crisis.
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Chairman and CEO Bob Nardelli said: “This initial loan will allow the company to continue an orderly restructuring.”
GM also received $4bn in emergency loans last week along with $6bn funding for affiliated finance arm GMAC.
Nardelli suggested by email to employees that the complexity of the deals had delayed the first payout to Chrysler, which had been expected to be completed before the end of the year, Reuters reported.
“The Treasury Department has been working to complete the multiple, complex financial arrangements quickly and sequentially. The magnitude of these discussions was significant,” Nardelli was quoted as saying.
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By GlobalDataWeekend TV news reports said dealers were upbeat now more funds were flowing. One New Jersey GM dealer last night told CBS News GMAC’s decision to lend to customers with a credit bureau score of 621 or above, a significant expansion compared to the 700 minimum set two months ago, was already bringing in customers to her showroom and deals were being done.
Nonetheless, industry pundits expect December sales results due out today to report the lowest full-year volume since 1992.
Meanwhile, both Chrysler and GM have to submit restructuring plans to the government by mid-February and show they remain viable by the end of March.
