The Treasury says that the U.S. will have lost about $1.3 billion on Chrysler, although it touted the bailout as a "major accomplishment."The United States Treasury Department announced today that, as it exits its investment in Chrysler, American taxpayers will lose around $1.3 billion on the government's bailout of the automaker in 2009.
The automaker paid back its loans to the governments of the U.S. and Canada about six years ahead of schedule and it is now 53.5 percent owned by Italy's Fiat. By the end of 2011, Fiat will likely be able to acquire an additional 5 percent of Chrysler when it produces a vehicle capable of netting 40 mpg in the U.S.
The governments recently sold their remaining 6 percent of Chrysler to Fiat for $560 million, which brought the U.S. up to a total of $11.2 billion recuperated from the $12.5 billion it provided the automaker. That $11.2 billion figure includes repayments of the loan's principal and interest.
Despite the $1.3 billion gap, the government called the bailout a "major accomplishment" as it cited the jobs that would have been lost had Chrysler been allowed to fail.
"With today's closing, the U.S. government has exited its investment in Chrysler at least six years earlier than expected," Tim Massad, the Treasury's assistant secretary for financial stability said in a release issued to members of the media.
Fiat will now be able to appoint a member to Chrysler's board, although the remaining approximately 45 percent of the automaker will still be controlled by a United Auto Workers health care trust.