DETROIT -- Chrysler Group LLC has chosen to withdraw its application for what originally had been as much as $7 billion in loans from the U.S. Department of Energy to encourage automakers to build more fuel efficient cars.
The automaker filed a one-sentence notice with the U.S. Securities and Exchange Commission earlier today, signed by Chief Financial Officer Richard Palmer, announcing the decision.
"The DOE's proposed terms were very restrictive and compliance would have negatively affected our operational flexibility," a Chrysler spokesperson said today.
Chrysler had sought funding under the Advanced Technology Vehicles Manufacturing loan program since shortly after it was first approved by Congress in 2007. The $25 billion program repays automakers for money that they have already expended to upgrade older plants in order to build more fuel efficient vehicles.
In a written statement, the automaker said the decision to withdraw its request "will not impact Chrysler's ability to achieve its previously announced business plan targets."
Earlier this month, Chrysler-Fiat CEO Sergio Marchionne expressed frustration with how long it had taken for the government to make a decision on Chrysler's request.
he automaker had lowered what it had requested to below $3.5 billion, although the CEO did not say how much it had been seeking. He said not getting approved for the loan "will put us in a very, very uncompetitive position against the other two [automakers] in Detroit."
Marchionne said of cross-town rivals Ford Motor Co. and General Motors:
"One blocked DoE funding and the other one was using equity capital, which is probably even a better substitute than DoE funding at a lower rate. So I'm the only guy who is sitting over here that pays back everything with interest and I am sitting over there and I don't want to be favored, I just don't want to be mistreated."