Chrysler's Third Bailout
Everyone knows that Chrysler's 2008 sales are down 30% (1.45 million vehicles) from 2007 and they are counting on federal bailout funds and Fiat technology to rebound. Chrysler claims it lost $8 billion last year.
Gerald Meyers, a former chairman of American Motors, estimates that the government's $6 billion will only last until the end of this year and Chrysler will need $65 to $130 billion to keep going for the next 3 years.
I thought that it was interesting to learn that history is repeating itself. Chrysler was bailed out two other times in the past. The first was in 1919 when Walter P. Chrysler bought the ailing Maxwell Motor Corp. and renamed it Chrysler Corp. The second bailout occurred in 1979 after Chrysler lost $1.2 billion and was heading towards bankruptcy. To save it, the federal government guaranteed $1.5 billion in loans. These were repaid in 1983.
Hopefully, it will survive again.