President Obama will be visiting one of Chrysler’s Toledo plants (one makes the Wrangler, the other makes the Liberty and, if still in production, the Nitro) next Friday to acknowledge repayment of the TARP loans. The repayment was made partly through a cash investment from Fiat, and partly through a move to private credit sources; interest rates are lower, and the company expects to save over a third of a billion dollars in interest.
Sergio Marchionne is expected to announce new investments in Toledo, and perhaps in the Trenton Engine North or another idled engine plant. Pentastar V6 demand is expected to be considerably higher than the capacity Chrysler currently has in Trenton South and Mexico, and reports from the company suggest that further investments in Mexico may be unlikely. Trenton North is still operating to finish service parts for Mopar, and will make various parts to supply Trenton South; it is a logical location for new investments due to its location and availability, but Chrysler may need a property tax exemption for the period while the plant is being renovated.
All of the new Chrysler’s government loans have been repaid, along with $1.8 billion in interest and other costs, which may help to defray the $2 billion loaned to the old pre-bankruptcy Chrysler by the Bush administration.
The government loaned money to all three Detroit automakers; Ford’s money came not from TARP but from the Department of Energy, and carried dramatically lower interest. Chrysler has not been able to arrange for this type of loan, though the money was allocated by Congress and applications were made.