Lee Iacocca suggests Chrysler return the government loan soon

Posted Jun 22nd 2009 10:20AM by Mark Fightmaster
Filed under: Ford Motor (F), General Motors (GM)

Former Chrysler CEO Lee Iacocca has decided to weigh in on the current situation at his former employer, when interviewed by the Associated Press. Iacocca believes that the automaker needs to get the government out of the business as soon as possible, noting that government intervention is "strong motivation to repay the loan early." Iacocca added that the government "oversight is just too extreme." He reminded readers how Chrysler repaid the previous ten year loan from the government in three.

Chrysler and General Motors (OTC: GMGMQ) are have both received billions of dollars in government loans. Chrysler has recently exited bankruptcy protection, while GM remains in Chapter 11. The Treasury Department's auto task force has already made its presence felt, forcing out both CEOs and is reshaping their boards.

The government also had a major hand in Fiat's takeover of Chrysler. The level of the government activity in Chrysler bothers Iacocca, but he knows that the company he used to lead and GM would have failed without taxpayer money, and that the results would have been disastrous in terms of unemployment.

Iacocca believes the automakers can rebound, noting he would invest in Chrysler and Ford (NYSE: F) now if he could, adding that "GM's got more serious problems," mainly its size. In addition, Iacocca believes that Fiat CEO Sergio Marchionne may have the charisma to turn Chrysler around -- much like Iacocca did when the company faced a similar situation in the 80s. The former head of Chrysler warned that's it's not going to be easy, especially as the cultures clash, but hopes it will work as Fiat has "become a pretty good company under this guy Marchionne."

Interestingly enough, Iacocca made these comments at the release of Ford's Iacocca Edition Mustang.

Tags: automaker bailout, autormakers, Chrysler, f, Fiat, Ford, General Motors, gm, gmgmq, inthenews, Lee Iacocca, Sergio Marchionne