Fiat Chrysler Wriggles Out From Under Past-due Loan by Outwaiting the Government

It took years, but Fiat Chrysler Automobiles finally unburdened itself from the weight of an unpaid loan by waiting until the government grew tired and gave up. Not that the automaker’s pursuer ever expected to recoup the cash.

It was revealed this week that Canada, which sunk nearly $14 billion into General Motors and Chrysler during the depths of the recession, quietly wrote off a $2.6 billion (CAD) loan made to Chrysler in 2009. It’s not the last bit of money owed to that country’s government by the two automakers, but it is a major outstanding chunk. In its defense, the feds didn’t have a hope in hell of getting the loan repaid, as the company that received it no longer exists.

“After exhausting all potential avenues for recovery, a $1.125 billion US principal plus accrued interest write-off in respect of ‘Old Chrysler’ occurred in March,” John Babcock of Global Affairs Canada told the CBC.

Documents show the money was loaned to Chrysler LLC in March 2009. The entity that sprung up in the defunct automaker’s wake, Fiat Chrysler Automobiles, did pay back a $1.7 billion loan in 2011. Further plumbing of the country’s finances shows an outstanding $1 billion-plus loan to the “Old GM” administered by Export Development Canada in April of 2009.

In 2015, the country’s government, which purchased GM stock to keep it afloat, sold its remaining 73.4 million shares to Goldman, Sachs & Co.

The revelation of the Chrysler write-off prompted anger among fiscal transparency types north of the border. Like in the U.S., the bailout left taxpayers on the hook for billions, but the picture of who owes what is more opaque in Canada. It’s estimated that Canada lost $3.7 billion on the deal. The U.S. Treasury said in 2014 that the total loss to American taxpayers was $9.26 billion.

News of the write-off would likely have garnered even more acrimony, had the feds not abstained from the same kind of corporate welfare enjoyed by Ford and Toyota in recent years. FCA has, however, seen recent funding from the Ontario government.

Two FCA assembly plants in Ontario crank out the Dodge Grand Caravan and Chrysler Pacifica minivans, as well as the rear-drive Chrysler 300 and Dodge Charger sedans and Dodge Challenger coupe.

a version of this story first appeared on thetruthaboutcars.com

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