Chrysler gets a $1.5 billion OK
The Carter administration gave final approval for $1.5 billion in government loan guarantees to prevent Chrysler Corporation, the nation's No. 3 automaker, from going bankrupt.A three-member board made up of Treasury Secretary G. William Miller, Federal Reserve Board chairman Paul A. Volcker, and Comptroller General Elmer B. Staats unanimously OK'd the US commitment after finding that Chrysler had obtained $2.03 billion in matching private funding.
The announcement came Saturday, shortly after the board received word that the Canadian government agreed to provide $200 million in loan insurance to Chrysler over three years in exchange for expanded auto manufacturing facilities in Canada.
The loan approval will go to Congress today (May 12). Both the Senate and House must consider the plan and are not expected to block it.
Mr. Miller told a news conference he expected the loans to be repaid on time and "therefore no liability will fall on American taxpayers." He said the guarantee commitment -- under which the government agrees to back loans by banks and other lending institutions to Chrysler should the automaker default -- will be good until the end of 1983.
Chrysler showed the severity of its cash crisis by reporting a January- through-March loss of $448.8 million -- the second largest for any quarter in its history. It will produce 400,000 small, fuel-efficient cars this year and 900,000 next year.