Filed under: Government/Legal, Chrysler, GM, Earnings/Financials
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The Detroit News reports Chrysler is walking away from the company’s pursuit of low-interest [Department of Energy](http://www.autoblog.com/tag/energy department) loans. The automaker originally applied for an $8.55 billion loan when it was still under [Cerberus Capital Management](http://www.autoblog.com/tag/cerberus capital management), though the figure had since shrunk to $3.5 billion. The DOE, meanwhile, said it was considering a much smaller $2 billion loan with additional restrictions than were previously negotiated. The loan period would also be significantly shorter. Chrysler had sought the funds as a way to reduce the company’s interest payments, which would have dropped by nearly 5 percentage points had the deal gone through.
Instead, Chrysler will use its own funds for capital improvements. The report says the company has nearly $11 billion in liquidity, though that figure includes $1.3 billion in an undrawn private loan.
Chrysler isn’t the only automaker to walk away from DOE loans. [General Motors](http://www.autoblog.com/tag/general motors) pulled its application for a $14.4 billion loan last January. The funds would have gone toward retooling. The DOE and the [Obama Administration](http://www.autoblog.com/tag/obama administration) have been hesitant to hand out more government money after the solar panel company Solyndra LLC received around $528 million loans before going bankrupt.Chrysler abandons plan seeking more federal loans originally appeared on Autoblog on Fri, 17 Feb 2012 09:28:00 EST. Please see our terms for use of feeds.
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