Chrysler Repays TARP Loans Early, Taxpayers Lose $1.3 Billion

According to recent articles from CNN Money and USA Today, Chrysler has repaid the remainder of it’s loans received in 2009 under the Troubles Asset Relief Program (TARP), and it did so 6 years only. The government originally committed $12.5 billion under TARP to what is now named “Old Chrysler” which is the entity that was created during Chrysler’s bankruptcy to house it’s old assets.

When the smoke clears, $11.2 billion have been returned to the Treasury through principal repayments, interest and canceled commitments, but the remaining $1.3 Billion will likely not be returned to the taxpayers. On the topic the Treasury Department was quoted as saying, “Treasury has the right to recover proceeds from the disposition of the liquidation trust associated with the bankruptcy of Old Chrysler but does not expect a material recovery from those assets.”

Also, as we reported last month, Fiat purchased the remaining 6% share that the U.S. Government holds of Chrysler for $500 million dollars, giving it a a total ownership of about 52% of the company. This exits Chrysler completely from both government financing via TARP as well as ownership and leaves only General Motors in a position of U.S. Government ownership.

As a comparison to Chrysler, the U.S. Treasury loaned General Motors $49.5 billion from the Troubled Assets Relief Program, which has been repaid as well, however there is some debate as to whether the loans were repaid from company proceeds or from unused TARP dollars. The U.S. Government still owns a controlling share of GM.

About the author

Robert Kibbe

Robert Kibbe is the owner of TheMuscleCarPlace.com and host of the weekly Muscle Car Place podcast show. He's based in Ames, IA, is married with 3 kids, and still thinks the General Lee is cool.
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