Ever take a really close look at fruit salad? It’s not necessary. Fruit salad is pretty self-explanatory. A collection of different fruits that makes up the whole salad. A cherry by itself, does not a salad make.
Well, unfortunately, we’ve seen some published, and posted, reports treating the entire $12.5 billion lent by the Federal government as the cherry and not the salad, and therefore questioning whether we had the right to mark our loan payback this past Tuesday.
It’s easy to be confused, so let’s pick apart the salad one fruit at a time.
Yes, the Federal government loaned a grand total of $12.5 billion to a former company known as Chrysler LLC, along with other entities including Chrysler Financial, GMAC and parts of the current Chrysler Group LLC. Those parts that did not go forward with the new company post-bankruptcy, and therefore were left behind for disposal, are under an entity commonly called Old Carco.
That’s your fruit salad.
Chrysler Group LLC is the cherry and stands alone. Chrysler Group LLC paid back its full obligation to the federal government—with interest.
Indeed, the U.S. Treasury lays it out soundly in its statement released on May 24. Of the $12.5 billion, “Chrysler has returned more than $10.6 billion of that amount to taxpayers through principal repayments, interests and cancelled commitments.”
“When Chrysler LLC (sic), the new company says, we paid back every penny we borrowed, that is 100 percent correct,” said Ron Bloom, special assistant to President Obama, in an interview with WJR, Detroit radio personality Paul W. Smith.
What the other elements of the “fruit salad” owe is completely separate and irrelevant to our company.
In the words of Chrysler Group LLC CEO, Sergio Marchionne speaking to Smith, “The funds that we’re talking about, this excess, are funds that Chrysler never saw. They funded things prior to bankruptcy, including operating losses that go back to 2008. I mean they were even given under the previous administration – they were not on President Obama’s watch, so I – these are things that this group doesn’t know.”