20.02.2012 CHRYSLER GROUP WITHDRAWS ITS BID FOR US$3.5 BILLION DEPT OF ENERGY LOAN

DODGE GRAND CARAVAN 2012

In a surprise announcement Chrysler Group has dropped its bid to gain a US$3.5 billion loan from the Department of Energy; the reasons are as yet unclear, but in its statement the automaker says that the decision won't affect its plans to introduce hybrid or electric vehicles.

Originally Chrysler Group has sought US$7 billion in loans, this was later parried down to US$3.5 billion but negotiations have dragged on continually. Media sources reported from the Detroit Motor Show, quoting government sources, that talks were still on going, but there has also been media speculation that Chrysler Group's resurgent form in terms of sales, revenue and profits meant that there was opposition within government to dishing out what could be a politically sensitive loan.

The terms of the loans are seen as somewhat restrictive as they mostly cover retooling and aspects of production. Out of the original US$25 billion put aside by the Department of Energy plenty is remaining: Ford received US$5.9 billion and Nissan US$1.4 billion while two hopefuls, Fisker and Tesla, have also received around one billion between them.

Chrysler Group LLC has decided to withdraw its application for an Advanced Technology Vehicles Manufacturing loan from the Department of Energy. The Company remains confident in its strategy to bring competitive, fuel-efficient vehicles and technologies to market on schedule. This decision will not impact Chrysler's ability to achieve its previously announced business plan targets.

Since it was formed in June 2009, Chrysler Group LLC has announced investments of more than $4.5 billion; added more than 9,400 jobs; repaid U.S. Treasury and Canadian government loans in full, with interest, six years early; launched 16 new or significantly refreshed vehicles in our first 19 months; launched production of the all-new C-segment Dodge Dart, which is being built in the U.S. using a Fiat-based architecture and fuel-efficient technology; and in 2011, Chrysler Group U.S. sales increased 26 percent, the largest percentage sales gain of any full-line manufacturer.
 

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