History repeated as Chrysler makes a big comeback

Article by Christian A., on May 29, 2011

Chrysler’s repayment of $7.6 billion in loans to the U.S. and Canadian governments gives an extra boost to the administration of President Barack Obama who lists the bailouts as a successful domestic policy.

Using private money, Chrysler was able to fully repay the loan six years before they were due. This isn’t the first time that Chrysler was able to pull off such a feat. In 1983, Chrysler was recovering from having entered a virtual bankruptcy three years earlier.

But on that year, it repaid $1.2 billion in government-guaranteed loans seven years before they were due. It’s uncertain whether taxpayers in the U.S. and Canada would be able to recover their full investment since it can’t be predicted what the value of their stock in Chrysler would be.

If the Obama administration had not insisted on bailing out the automakers, the situation would have been much worse. In addition, the auto bailout may serve as a template for handling the budget deficit and entitlement reform.

It should be noted though that with the government’s decision to rescue Chrysler and GM, the sacrifices were shared by the employees, managers, dealers, bondholders, shareholders, and taxpayers.

It was not completely voluntary but apparently, it was an effective plan. Now, the question is if what took place in 1983 will be repeated.

Several months after the loans were repaid in 1983, Chrysler launched its innovative new minivan, which was such an amazing vehicle that even Car and Driver magazine made a recommendation to purchase the carmaker’s stock.

If you liked the article, share on:

Comments

Recommended

During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 23, 2017
How fast can a 2017 Chevrolet Camaro ZL1 actually go? Considering the amount of power lurking underneath its line-laden bonnet, the 2017 Camaro ZL1 is capable of achieving a top...
by - February 23, 2017
As it turned out, we’ll be seeing Toyota’s new super supermini at the 2017 Geneva Motor Show in March. It’s time we all get to meet the new Toyota Yaris...
by - February 23, 2017
Opel revealed it has sweetened the pot for 2017 Insignia Grand Sport customers with the Opel Exclusive program. Through this program, the brand hopes to introduce a wide selection of...
by - February 22, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries