Giving It Back

Chrysler to repay $400 million

Chrysler Chairman Lee lacocca had some startling news at his company's annual shareholders meeting in Detroit last week. "Just try to name a person, corporation or government that has paid off a note seven years ahead of schedule," said lacocca with a broad smile. But that is what Chrysler is about to do. Next month, announced lacocca, Chrysler will be forking over $400 million, or one-third of its federally guaranteed loans.

Washington backed $1.2 billion in loans from banks and other lenders to Chrysler in 1980 and 1981 to spare it from bankruptcy. The company dropped $3.48 billion from 1978 through 1981, the worst corporate loss in U.S. history. Though Chrysler does not have to repay the loans until 1990, its officials now hope to clear the $800 million balance by 1985. That would save the company a bundle; next month's $400 million payment alone will mean a saving of $31 million in interest annually.

Chrysler officials said the action was made possible by the recent drop in interest rates. The company can now borrow any money it needs at lower rates than it was paying for the loans it is retiring. . This file is automatically generated by a robot program, so viewer discretion is required.