Crysler has taken the final step towards freedom from Uncle Sam by paying off the rest of its government loans. USA Today reports that Chrysler and Fiat paid the Treasury Department $500 million for 98,461 shares and $60 million for shares from a pact with the United Auto Workers’ VEBA retirement trust.
The payment means that Chrysler shed its government obligations a full six years ahead of schedule. The automaker made the move in part to show U.S. car buyers that it is independent of government control, but the payment also means that the automaker no longer has to pay interest rates on the loan.
Assistant Secretary for Financial Stability Tim Massad called the move “a major accomplishment and further evidence of the success of the Administration’s actions to assist the U.S. auto industry.” He added, “We didn’t make the auto interventions to make money, we made them to save jobs – and on that front, we dramatically succeeded.”
True enough, but Uncle Sam probably won’t receive the $1.3 billion owed by Old Chrysler, which was separated from the current Chrysler during bankruptcy. The department said in a statement that it has the right to recover assets from Old Chrysler, but doesn’t expect “a material recovery of those assets.”