Last week, Chrysler officials confirmed the automaker formally withdrew its application for a loan from the U.S. Department of Energy’s Advanced Vehicle Manufacturing program.
In 2008, Chrysler applied for a loan of $7 billion from the Department of Energy’s (DOE) Advanced Technology Vehicle Manufacturing program. The program was sent up during George W. Bush’s administration with Congress approving $25 billion to fund the loan program. Later, Chrysler reduced the loan request to $3 billion.
“The Department of Energy’s proposed terms were very restrictive and compliance would have negatively affected our operational flexibility,” Chrysler said in a statement, to the Detroit Free Press.
We contacted Chrysler inquiring whether the cancellation of the loan request would affect the RAM PHEV and Hydraulic Hybrid Town & Country programs. We were referred to the automaker’s media site which said: Chrysler “remains confident in its strategy to bring competitive, fuel-efficient vehicles and technologies to market on schedule.” The statement also indicated that the decision to withdraw a loan request would “not impact Chrysler’s ability to achieve its previously announced business plan targets.”
Chrysler spokesperson Vince Muniga later told us that the Ram PHEV and Hydraulic Hybrid Town & Country programs were funded by a grant and will not be affected by the loan application cancellation. Chrysler and parent company Fiat also plan to launch an electric Fiat 500 later this year.
“While we were continuing to work with Chrysler to come to an agreement, we are pleased that they are capable of achieving their business goals without department support,” Damien LaVera, a DOE spokesman, told the Detroit Free Press. LaVera also said that the loan program still has $16 billion in loan funds available.
Of the $25 billion initially earmarked for the DOE’s Advanced Technology Vehicle Manufacturing loan program, $5.9 billion went to Ford; $1.4 billion went to Nissan; and $529 million went to Fisker Automotive. In January 2011, General Motors withdrew its application for a loan.
Source: Chrysler, Detroit Free Press