US Government may lose Chrysler loans

David Shephardson of the Detroit News has just posted an article quoting Chrysler’s senior financial advisor Ron Manzo as saying that the company would be unlikely to repay the $4 billion loaned by the Bush Administration in January. Shephardson confirmed with a “government official” that Chrysler would probably not repay that first $4 billion. The Treasury will, however, get a small stake (8%) in the company. 

The $6 billion in additional financing promised by the Treasury and Canada would have to be repaid before Fiat could claim its additional 15% of Chrysler equity.