Chrysler to sever US government ties

The deal means the U.S. government won’t get back the full $12.5 billion in bailout loans it gave Chrysler from the end of 2008 through Chrysler’s bankruptcy in the summer of 2009. The Treasury Department said Thursday that Chrysler has repaid $11.2 billion, but it is unlikely to recover $1.3 billion. But government officials have long said that they didn’t expect to recover the full amount they loaned to Chrysler and General Motors Co. during the auto industry downturn, and that their top priority was saving thousands of auto jobs.

“We didn’t do this to maximize return. We did it to save jobs,” Treasury Secretary Timothy Geithner said during a trip to Detroit in April.

Fiat also agreed to pay $75 million for the right to purchase the Chrysler shares held by a trust for retired autoworkers. The Treasury will receive 80 percent of those proceeds, or $60 million, while the government of Canada will get $15 million. The trust holds a 47 percent stake in the company.

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