DETROIT -- With its government loans repaid six years ahead of schedule, Chrysler Group will now work toward an initial public offering and closer integration with its alliance partner – Fiat SpA.
Chrysler CEO Sergio Marchionne, speaking Tuesday at a ceremony to mark the repayment of Chrysler's loans from the U.S. and Canadian governments, said the two companies are increasing the pace of their integration.
"The alliance is moving forward rapidly and we are doing everything possible to accelerate the pace and bring about, in the shortest possible time, the birth of a single group, bringing even greater stability and strength to the relationship, in the interests of both partners," Marchionne told journalists and employees at the Sterling Heights assembly plant in suburban Detroit.
The next undertaking for the two partners is the homologation of a compact car, based on Fiat architecture. It will probably be built at Chrysler's Belvidere, Ill., assembly plant starting in the first quarter of 2012, Marchionne said.
Using wire transfers, Chrysler today repaid $7.6 billion in loans to the U.S. and Canadian governments, nearly two years after the No. 3 automaker was rescued.
The company said it made a payment of $5.9 billion to the U.S. Treasury and $1.7 billion to Export Development Canada -- retiring loans that allowed Chrysler to exit bankruptcy in June 2009. Chrysler completed repayment of the loans six years ahead of schedule.
"Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise," Marchionne said in a statement. "The loans gave us a rare second chance to demonstrate what the people of this company can deliver and we owe a debt of gratitude to those whose intervention allowed Chrysler to re-establish itself as a strong and viable carmaker."
With Tuesday's transaction, the U.S. government's stake in Chrysler has been reduced to 6.6 percent from 8.6 percent, and Canada's interest has been cut to 1.7 percent from 2.2 percent, a company spokesperson said.
Fiat now owns a 46 percent stake, up from 30 percent, and a UAW retiree health care trust owns 45.7 percent, down from 59.2 percent.
Chrysler's fortunes have been boosted by improved sales as it rolls out 16 new or refreshed models this year. In the first quarter, the company reported a net profit for the first time since exiting bankruptcy under the control of Italy's Fiat.
The automaker borrowed $5.1 billion from the United States and $1.6 billion from Canada in June 2009.
Chrysler said it has paid $6.5 billion in total to the U.S. government, and $2 billion in total to EDC. The amounts include $1.8 billion in interest.
Marchionne used the speech Tuesday to thank the U.S. and Canadian governments, Chrysler employees and his management team for their contributions in Chrysler's recovery.
The company distributed red and blue "Paid" buttons to workers to mark the occasion.