Obama Expects GM, Chrysler to Repay Loans

Contrary to what some analysts believe, US President Barack Obama expects both General Motors and Chrysler to repay the government loans they have received to stay in business and operate during bankruptcy. Obama says saving the two automakers using state funds was a critical decision because hundreds of thousands of jobs have been protected from what could have represented the biggest job cut of all times.

"If GM and Chrysler were willing to do what was necessary to make themselves competitive and if taxpayers were repaid every dime they put on the line, it was a process worth supporting," Obama said in Raleigh, N.C. according to Reuters. "We saved hundreds of thousands of jobs as a result and expect to get our money back."

Back in May, when Chrysler was living under Chapter 11 protection, a top company adviser made a gloomy forecast: Chrysler won't be able to repay its debts to the US government, even if it survives with the help of Italian manufacturer Fiat.

And Chrysler is indeed operating as a clean and new company allied with Fiat, as the Italian manufacturer now holds a 20 percent stake in the Chrysler. But Chrysler repaying its debts to the government might mean handing over the majority stake to Fiat, according to official papers of the deal.

What's interesting is that industry experts now believe the US and the Canadian governments should get out of the auto sector as soon as possible, as they both hold stakes in GM and Chrysler. However, government officials repeatedly insisted they won't get involved in the two companies' day by day activities, emphasizing that the newly-appointed boards will be solely responsible for the future of the two giants.