Chrysler's bipartisan bailout "partnership for technology transformation" effort
With the Democratic National Convention wrapping up tonight and the Republicans getting ready for their convention next week, this is a good time to take a look at one of the automakers who is/will be at both events. Chrysler's VP of external affairs, John Bozzella, talked about his experiences in Denver this week trying to get "Congressional support for funding the auto industry's technology transformation to build a new fleet of fuel-efficient vehicles." Please, don't call it a bailout.
In an interview at the Chrysler site The Firehouse (subs req'd), Bozzella said that after talking to Dems this week and GOP members next week, he hopes that a new technology partnership that would support automakers as they design vehicles that use less fuel and emit fewer greenhouse gases could be funded before next year. The partnership would loan automakers money "to transform Chrysler and the industry at a time when the capital isn't available to do so. That's why it's important to Chrysler because it gives us the access to capital to drive ENVI, to drive our hybrid strategy and to continue to make progress across the fleet on fuel economy. It's important to the country because we can't make progress on energy security and reducing greenhouse gases without a significant contribution from the auto industry." Somebody make a note of that.
[Source: The Firehouse (subs req'd)]
Reader Comments (Page 1 of 1)
Isellbeachhomes 3:12PM (8/28/2008)
Are you kidding me. It is a bailout because they were not focusing on new technology when they should have been.
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Chris M 6:37PM (8/28/2008)
As Chrysler is now owned by Cerebus Capital Management, a financial investment firm, It makes me suspect that they'd like to get a low interest loan from the government, then use that money to make higher yield (and potentially risky) investments, instead of bothering to upgrade production at Chrysler. If Cerebus ever figures that it would be more profitable to liquidate Chrysler than to keep it going, that is exactly what they'll do.
The reason the "big 3" can't get low interest loans through regular finanical channels is because of the high risk of default. High risk loans carry high interest rates.
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georgejetson 3:33PM (8/29/2008)
Chris M, those higher yielding investments will be in future product for Chrysler. I don't think Cerberus has any agenda here other than the obvious one, and I think any suggestion otherwise is baseless and ill-informed.