The bid for energy loans is for Chrysler a perk it intends to own. And while other companies have dropped out from the race, Chrysler’s CEO isn’t ready to leave such an opportunity go. Along with other strategies, Chrysler started his bid with the Super Bowl.
Bloomberg writes that Sergio Marchionne, CEO of Chrysler, told reporters present at the National Automobile Dealers Association convention in Las Vegas, that he’s not ready to give up his bid for loans from the U.S. Energy Department, despite other companies’ failure.
At the moment, Chrysler could borrow less than the originally $3.5 billion loan they wanted in 2011. Marchionne said the following about the U.S. program intended to encourage production of fuel efficient vehicles:
“The due diligence process that they have inside the Department of Energy is one which is reflective of a series of concerns, part of which are maybe attributable to recent events and some of the deals they’ve done”.
And past deals have been disastrous enough to bring scrutiny towards the government’s easy going when it came to giving loans to companies. Ener1 Inc is among the companies that got loans from the U.S. Energy Department. It got $118 million from the fuel efficient vehicles program but at the beginning of this year the company filed for bankruptcy protection. And Ener1 Inc is just the latest to waste the money.
Marchionne believes that won’t be the case of Chrysler. He says he is able to bring in the market compressed natural gas powered vehicles to meet the 2025 standards of 54.5 miles per gallon fuel economy. “We’re going to start showing the product, and then we’ll see whether people will take them” he added.
Part of Marchionne’s strategy to make Chrysler look more attractive to the consumers started with an ad at the Super Bowl. Clint Eastwood spoke in a two minute ad about the way unemployed people can improve their life. The answer is Chrysler.
“People are out of work and they’re hurting. And they’re all wondering what they’re going to do to make a comeback. The people of Detroit know a little something about this”, said the ad in reference to General Motors and Chrysler.
Jeremy Anwyl, vice chairman of auto researcher Edmunds.com, said Chrysler was going for “an emotional theme”, which “sounded like an Obama re-election campaign”.
Well, of course, the loans for advanced technology from the Department of Energy have now become politically controversial, since solar panel manufacturer Solyndra filed for Chapter 11 bankruptcy last year. The company actually received about $500 million in loans from different departments of energy program. And it is natural that Solyndra’s problems prompted congressional hearings into the Department of Energy’s loan programs, turning the prospects of a loan to Chrysler into a potentially thorny political problem. Chrysler had nothing to do but to ask for about $7 billion from the $25 billion Advanced Technology Vehicle Manufacturing program….
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