Chrysler Unlikely to Repay Government Loans

An interesting story, related to the same over-discussed bankruptcy filing of Chrysler, saw daylight today, this time pointing to a subject we all think about, but only a few had the guts to tackle it: the American manufacturer who is now living under the protection of Chapter 11 might be unable to repay its debts to the US and Canadian governments. The statement was made by a top company adviser, the Detroit News wrote.

To refresh your memory, Chrysler has just received $4.5 billion in US and Canadian government loans which will help the company finance its operations under bankruptcy protection. Corinne Ball, Chrysler's lead bankruptcy attorney, said the loan is extremely important for the car manufacturer and described it as a "lifeline" pointing that Chrysler needs every single cent to stay alive.

"The survival of Chrysler's business is at stake in these proceedings, as is the fate of hundreds of suppliers and thousands of Chrysler dealers around the country," Ball was quoted as saying by the aforementioned source.

Chrysler has also completed the strategic alliance with Fiat, a partnership which led to an avalanche of new reports regarding the models to be sold by the Italian automaker in the United States. However, according to official bankruptcy papers, "Fiat would give Chrysler access to its 3.0-liter diesel engine and 1.4-liter gas engine technology, critical pieces for Chrysler to meet the new fuel economy standards."

Furthermore, "Fiat and Chrysler have agreed to manufacture at one of Chrysler's U.S. plants, and Fiat's small car F500 and Fiat's hatchback," which confirmed that Fiat 500 is going to be one of the models to be sold in the United States by the Italian company.