Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Chrysler financing arm rejects U.S. aid

Limits on executive pay said to keep Chrysler Financial from accepting loan.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Scott Spoerry, CNN senior producer

Which Fortune 500 company will emerge from the recession with the most respect?
  • Exxon Mobil
  • Wal-Mart
  • Chevron
  • ConocoPhillips
  • GE

WASHINGTON (CNN) -- Chrysler Financial turned down additional government funding this month because executives at the financing arm of the troubled auto manufacturer could not agree to new government-mandated limits on executive pay, according to a source familiar with the matter.

An official with Chrysler Financial told CNN that the loan was turned down because the company "has determined that it has adequate private capital funding to cover the short-term needs of our dealers and customers and as such, no additional TARP funding is necessary at this time."

The official also said that company executives "have not been presented with any new demands with regard to executive compensation."

Chrysler Financial - which is separate from automaker Chrysler LLC but has the same majority owner, Cerberus Capital Management - already borrowed $1.5 billion from the Treasury under the Troubled Asset Relief Program, or TARP, but those loans were made under less strict regulations pertaining to executive compensation.

The Washington Post, which first reported the story online Monday, said the amount of the loan Chrysler Financial rejected was $750 million.

A Treasury Department spokesman declined to confirm the loan rejection, but told CNN that the administration's Auto Task Force continues to monitor the financing situations for Chrysler Financial and General Motors (GM, Fortune 500).

"This is an issue that Chrysler and its stakeholders will need to address as part of this process," the spokesman said.

Chrysler LLC has until the end of this month to reach a deal, most likely with Italian carmaker Fiat, to maintain U.S. government financial aid and avoid a bankruptcy filing. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
A look at Sears through the years Now Sears has officially said its business has an uncertain future, here's a look at photographs that documents the store's rich history. More
Coolest hotel bars for business travelers in 2017 CNNMoney asked a high-end concierge service for routine business travelers what hotel bars they'd recommend in 4 major U.S. cities. Here are the best spots. More
Top credit cards for business travelers 2017 Just like a pair of pants, there's no 'one size fits all' when it comes to the best credit cards for travelers. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play