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Chrysler Desperately Seeking Federal Funding

In recent weeks, GM has decided to withdrawal its request for federal loans that are given by the Energy Department, however, though they have rejected the assistance. Other auto makers are greatly needing this extra funding in order to make sure that their company stays afloat in these hard economic times. 

Chrysler has made it clear that the company needs the $3 billion that they have asked for in order to keep the company going in a positive direction. However, Washington is not giving in so easily. Chrysler has been arguing back and forth with Washington for the last months in an effort to get the money that they thought they would be awarded before the end of 2010. 

The problem with receiving the loan seems to be that Chrysler does not seem to have the collateral in order to qualify for the loan, as well as the government would like since the bailout that the automaker declared bankruptcy, the American people already own the majority of the company. However, in the last few years, the government has wondered if Chrysler was truly worth saving. The vehicles that Chrysler is producing are not those that are the best when it comes to fuel economy, which has lowered the popularity of their vehicles. 

Chrysler has been outspoken about how much the company needs the federal funding stating that the money will be used to further develop more stronger fuel economy vehicles that the public will respond to greatly. However, most professionals are worrying that the money would be spent towards just trying to get their factories to the point in which they could even start to produce these kinds of vehicles. 

Chrysler is still confident that they will receive the funding that they are seeking. However, most others that are not involved with the deal are worried. The decision to award the funding is not the smartest decision from a financial perspective given that the collateral is not there.