Senator wants Chrysler loans canceled

Chrysler LLC should be forced to pay back its $4-billion loan from the U.S. Treasury should Fiat S.p.A. take control of the automaker, a U.S. senator told President Barack Obama today. In a letter, U.S. Sen. Robert Menendez, D-N.J., said he did not want “American taxpayers paying to prop up the foreign auto industry." Under the terms of the deal announced Tuesday, Fiat will take a 35% stake in Chrysler, and has the right to increase its stake to 55% if the two companies work well together.

While Chrysler has received a $4-billion loan and is asking for $3 billion more from the Treasury, Fiat did not inject any cash into Chrysler as part of the deal, nor made any commitments to do so. The Treasury has the power to review and reject any transaction at Chrysler of more than $100 million.

“I am asking you to address the potentiality of foreign control and require the immediate payback of the loans already dispersed should such a scenario present itself," Menendez said. “I am sure you would agree that the responsible action is to ensure that American taxpayers are not financing foreign automakers."