Paying off debt is a dream shared by most Americans, however, most of them aren't staring down $7.5 billion that's owed to the United States and Canadian governments. Chrysler accountants currently see that on the balance sheet, and we imagine that figure looks rather daunting. Lucky for them, Chrysler is set to pay it back. All of it.

Chrysler is preparing to announce details of a $3.5 billion bond offering. Those funds, along with $1.3 billion in cash from Fiat and a $2.5 billion term loan, will be used to pay back the two government loans.

Fiat has previously expressed a desire to own a larger stake in Chrysler, and paying down this debt is the bridge it needs to cross to make that happen. Right now, Fiat owns 46 percent of the American automaker, but rumor has it that the Italians want 51 percent by year's end, and possibly as much as 70 percent at some point in the near future. For now, however, Fiat is showing that it's dedicated to returning Chrysler to a position of success.


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  • 68 Comments
      Steve
      • 3 Years Ago
      Good idea. Will that go towards paying the deficit? A lot of jobs were saved. Now, lets get back to work making good quality vehicles. If this happens again. No more loans!!!
        • 3 Years Ago
        @Steve
        [blocked]
          Sid Hatfield
          • 3 Years Ago
          Really? That would have caused tens of thousands of people to loose their jobs, not just in the assembly plants but in the entire OEM supply chain scattered across states all ove the country. The ripple effect would have devestated not just the domestic "big-three" but all the auto production plants everywhere in the USA and Canada. But hey, anything to break the unions right?
      dukeisduke
      • 3 Years Ago
      They've gotta hang on for two more years, until all the new platforms get into the pipeline. And hope that their quality improves (or they're sunk).
      TB
      • 3 Years Ago
      @ Butterfly. Its an option on the checklist. All a person has to do is not check it. However, they are badly in need of a small car to replace that Caliber.
        Rob
        • 3 Years Ago
        @TB
        Heh, they've needed something to replace the Caliber since the first one rolled off the production line
        suzq044
        • 3 Years Ago
        @TB
        no worries.. it's in the works. Ralph doesnt like it either.. lol
      Nowuries
      • 3 Years Ago
      Great job automakers!! Now I hope the Gov't holds the banks/investment firms accountable for the money they owe us...
      1guyin10
      • 3 Years Ago
      I think you need to check your numbers. Fiat currently owns a 30% stake. This move allows them to buy an additional 16% (to get to 46%). Later in the year they will roll out the replacement for the Caliber which is the benchmark that earns them another 5%. When all that plays out they will have a 51% stake.
      • 3 Years Ago
      [blocked]
        foci
        • 3 Years Ago
        Butterfly They sell the Hemi package via emotion not logic.
        cadetgray
        • 3 Years Ago
        Considering they have a very efficient Pentastar V6 going into most models, the HEMI is not a liability but rather an asset for those few who still want 363 hp and 394 lb ft at 16 city/25 hwy in the 2011 300C. Compared to the Lexus V8 the HEMI gets 1 mpg better hwy and the same city. Compared to the Hyundai V8 the HEMI gets the same hwy mpg and only 1 less mpg city. Yet the HEMI has 27 more torque than the Lexus and 70 more torque than the Hyundai. The HEMI hp trails the Lexus by 17 hp and the Hyundai by 15 hp. For most driving situations, I'd much rather have more torque over horsepower anyway. Indeed, the Lexus and Hyundai are not even recommended for towing whereas the 300C is rated for 1000 lbs. For the life of me, I cannot understand a V8 not rated for towing!
        Sid Hatfield
        • 3 Years Ago
        Because people like me keep buying them ...probably because I'm not a fairy, er I mean "butterfly" Hey Mopar haters...suck it!
        threefortyduster
        • 3 Years Ago
        So you are saying that Nissan and Toyota's V8 powered SUVs and trucks get significantly different mileage from Dodge. Or from GM. Or from Ford? People who need the power and towing ability provided by a V8 SUV or truck will always buy them. Those who don't need them will run away when the gas prices rise. For the record: Nissan Pathfinder V8-13/18 city/hwy, Toyota Sequoia 5.7 13/18, Tundra 4wd 5.7 13/17. 2011 Dodge Durango 4wd Hemi Gas Guzzler-13/20. Ram 1500 4wd Hemi Gas Guzzler- 13/19. Don't try to say Chrysler makes less efficient V8s than anyone else when Toyota and Nissan get worse mileage across the line, even with Toyota's 6 speed trans compared to Chrysler's 5. Now that you have some facts, please file them away so you don't look like an idiot.
          axiomatik
          • 3 Years Ago
          @threefortyduster
          why would anyone compare any 300C with the LS Hybrid? The LS Hybrid *starts* at $112k. These are not even remotely similar price brackets.
          • 3 Years Ago
          @threefortyduster
          [blocked]
          • 3 Years Ago
          @threefortyduster
          [blocked]
          ahjotah
          • 3 Years Ago
          @threefortyduster
          @ say what - Since there is no such thing as an LS560, then I'm assuming you mean the 460, in which case....um, where are you getting 438hp and 19mpg?? (That's the combined). Try a whopping 17 more hp and 27 lb/ft LESS torque. Oh and 1mpg worse on the highway. All this and with a smaller engine and 3 more gears! And it'll cost you 30 grand more! lol FAIL. For the record, Chrysler's 300 matches that combined 19mpg. See all links below. http://www.edmunds.com/lexus/ls-460/2011/features-specs.html?style=101360920 http://www.edmunds.com/chrysler/300/2011/features-specs.html?style=101375489 http://www.lexus.com/models/LS/detailed_specifications.html http://www.fueleconomy.gov/feg/noframes/31019.shtml
          ahjotah
          • 3 Years Ago
          @threefortyduster
          No kidding Jaybird36, gosh, when I looked at all those pages I linked to I hadn't thought "maybe he means the LS 600h". It's a hybrid - of course it's going to get better MPG, but if we're comparing apples to apples, the advantage goes to Chrysler. If they can match Lexus on a non-hybrid car, I'm sure they could also do it w/their own hybrid and (soon to be used) 8-speed auto. Plus saying it has 438hp is rather moot, it's not meant to be a performance vehicle as that would very quickly lower its MPG and defeat the purpose....plus it's a Lexus and an LS at that.
          marchingcav
          • 3 Years Ago
          @threefortyduster
          What make it worst is that the 300 and LS are not even competitors, do y'all remember the GS? Even if the 300 went against the LS I would had felt good paying 32k for a 300C getting 19mpg (25hwy) than paying 65K for the LS. Shoot ill even feel good gettin a 55k SRT8
        Krazeecain
        • 3 Years Ago
        That's a good question. How the hell is GM going to keep selling its V8's too? Or Ford? What about ferrari?! They have TERRIBLE gas mileage! and Lamborghini too! Oh dear... It looks like they're all screwed!
          • 3 Years Ago
          @Krazeecain
          [blocked]
        • 3 Years Ago
        [blocked]
          threefortyduster
          • 3 Years Ago
          What did your comment have to do with the prius or economical CUVs? Your comment was "If gas prices remain where they are, how on earth in Chrysler going to keep selling their HEMI gas guzzlers?" I don't see where you mentioned hybrids, 4 cyl cuvs, or anything in there. If you want to bring those in though, you can throw the Patriot and Compass in, which are rated at 27-28 on the highway, equaling the Rav4, Rogue, and CR-V.
      Curtis
      • 3 Years Ago
      this is good news on many accounts.
      chrisc9199
      • 3 Years Ago
      So they're taking out a loan to pay of their loans?
        David H
        • 3 Years Ago
        @chrisc9199
        I suppose this is not unlike taking on a lower interest loan to pay off a higher interest loan. Any deal with the current US government. is a bad deal. If I were Chrysler or GM, I'd do nearly ANYTHING to ensure that Obama and his crew of thugs had as little influence into my business as possible.
          T
          • 3 Years Ago
          @David H
          What a moronic statement! It just goes to prove that this was a good decision by the US government and the Obama administration to preserve jobs and keep the economy from complete collapse. The cost to US tax payers would have been much, much more had they not acted decisively. Foreign automakers, including Japanese and Korean automakers are regularly subsidized by their governments to help them export to and compete in OUR markets. Now, if we can just stop our government from providing corporate welfare for the oil companies, banks and billionaires!
          Rick C.
          • 3 Years Ago
          @David H
          Exactly! No influence on my personal affairs whatsoever. Somewhat like the thugs who pursued certain ideological doctrines over the prior eight years and almost tanked the world economy. However, they did exceed quite brilliantly in creating millions of homeless and unemployed people, and they get an A+ in destroying the savings of untold millions. Awesome.
          • 3 Years Ago
          @David H
          [blocked]
          • 3 Years Ago
          @David H
          [blocked]
          axiomatik
          • 3 Years Ago
          @David H
          I find these "discussions" to be quite humorous. If you are a liberal, thank god Obama fixed everything after Bush ruined everything. If you are a conservative, how dare Obama and his "thugs" prevent the collapse of the US auto industry and bankrupt the country. @Mike K - unsurprisingly, your comment provides incomplete information. Under Bush, the TARP bailout was authorized to save the failing banks. In December, the Bush administration gave GM and Chrysler loans, essentially punting the problem to the Obama administration. Bush didn't want to end his administration with the destruction of the auto industry, but he also didn't want to do what was necessary to save it either. So the automakers got some loans, much smaller than they asked for, just sufficient enough to last them a few months at the rate they were bleeding money. Under Obama, the bankruptcies were organized and the automakers were given funding from some of the left over TRAP funds in return for equity.
        dougs2k
        • 3 Years Ago
        @chrisc9199
        As long as our tax funded loans are being paid back by private companies, nothing wrong with that. Better than the banks we bailed out who will probably NEVER pay the gov't back.
          Samurai Jack
          • 3 Years Ago
          @dougs2k
          Do you know how much money the government made on Citibank? They didn't just give the banks money, they took equity stakes in them in return. Since the banks have recovered and done everything in their power to get rid of the government's ownership the Feds have received quite the windfall. Even for the banks that failed the assets that the government took over still have a shot at coming good someday. These things aren't as black and white as they may appear on the surface...
      GMan
      • 3 Years Ago
      They act like they're all proud to be paying this debt back. News flash: if you were good, you wouldn't have needed the bailout to begin with.
        gtv4rudy
        • 3 Years Ago
        @GMan
        It's new management at Chrysler who is paying back the debt. The old management are the ones who destroyed Chrysler.
          Jesse Lee Peterson
          • 3 Years Ago
          @gtv4rudy
          Wonderful, they are using a new credit card to pay off the old, maxed-out one. That'll work, right?
      Imaginary lines
      • 3 Years Ago
      Go Chrysler Corp!!!
      • 3 Years Ago
      [blocked]
        • 3 Years Ago
        [blocked]
          savagemike
          • 3 Years Ago
          No, it's not. What is very, very valuable is the dealership and distribution network. What is needed though is product to capitalize on it.
          • 3 Years Ago
          [blocked]
      Robert Kyle
      • 3 Years Ago
      So again, the Tea Baggers are wrong about bailing out Chrysler. They would have have hundreds of thou of jobs evaporate (how patriotic of them). Tarp and the automotive bailouts were the only good thing that Bush done right. Saved the economy from 20% unemployment or worse.
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