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Chrysler and GM Looking to Receive Funding from Energy Department

Last year Chrysler was given millions of dollars as part of the auto manufacturers bailout given to them by government. Now, Chrysler has applied for another loan in order to retool their factories to produce more fuel efficient vehicles. It is rumored that the amount is around $10 billion. However, it is not clear if the government will give Chrysler the full $10 billion or a fraction of this.

The loan will be a welcoming sign that the government is gaining more confidence in the auto maker industry. In addition, this loan could help Chrysler to begin paying back the $7 billion that the company owes the government for the bail out funds that the company received.

Chrysler is in the process of developing new vehicles that utilize the Fiat technology, which is the company that Chrysler partnered with during the bail out process. They are hoping to reach a whole new audience with these cars and start to begin seeing more profit. It is clear that Chrysler will have to do something as their vehicles no longer compare to the fuel economy that many other brands, such as Toyota, get, making more and more consumers turn to these brands to save money.

The same loan that Chrysler has applied for through the Energy Department, is also being sought after by GM, who is rumored to have asked for $14 billion to begin the deal of improving the line of vehicles as well. However, the Energy Department has not commented on just how much they plan to award this year. Last year they handed out $8.4 billion to a handful of car manufacturers, including Ford and Nissan, who have both reported decent quarters. However, they have commented that they are in discussion with both, Chrysler and GM vehicle manufacturers, as both are good candidates to receive the award and could put the money to good use.