Chrysler, Tesla over federal loan repayment

BY Deepa Seetharaman | FROM Washington Post | 2013-05-24 11:20

May 24, 2013 12:27 AM EDT    Friday, May 24, 8:27 AM

DETROIT — Chrysler Group and Tesla Motors, both led by media-savvy executives, are trading public jabs over the definition of payback.
Tesla wired $452 million Wednesday to repay the remaining portion of its U.S. Department of Energy loan, with interest. The company described itself as “the only American car company to have fully repaid the government.”
Chrysler’s snappy rejoinder came four hours later: “Not exactly, Tesla.”
In 2009, Tesla won a federal loan as part of a DOE program to promote advanced vehicle development. That same year, the U.S. and Canadian governments shored up Chrysler with billions of dollars of loans to prevent its collapse.
Chrysler, which is now majority owned by the Italian automaker Fiat, repaid $7.6 billion in federal loans in 2011.
Tesla’s “information is unmistakably incorrect,” Chrysler said in a blog post. “Question: short memory or short-circuit?”
Sergio Marchionne has led both Fiat and Chrysler since 2009, and many analysts credit his hands-on and outspoken style as critical to his company’s success.
The same can be said about Elon Musk, who has been Tesla’s chief executive since October 2008. He regularly uses Twitter to tout Tesla’s achievements or spar with electric-car naysayers.
Musk took to the Twitter to defend his company’s news release. Chrysler could not be counted as a U.S. car company because it is a division of Fiat, he said.
The Treasury Department committed a total of $12.5 billion to Chrysler. The “good” assets of Chrysler were used to form the current company, while billions of dollars of federal loans were left to another entity dubbed “Old Chrysler.”
The U.S. government recouped about $11.2 billion of its funds. In 2011, Treasury said it was unlikely to fully recover $1.3 billion owed by Old Chrysler.
“More importantly, Chrysler failed to pay back $1.3B,” Musk said in his tweet. “Apart those 2 points, you were totally 1st.”