The specific sum is in relation to a $4-billion TARP loan that the Treasury underwritten on January 2, 2009.

The current payment is below the face value of the loan, but the amount received by the Treasury was greater than expected.

The U.S. Treasury to date has given Chrysler just over $14-billion in total loan payments to ensure the auto giant survives the global economic downturn and the credit crunch.

Chrysler currently has no other outstanding obligations with the U.S. Treasury in relation to TARP funds.

Chrysler most recently reported a significant $197-million total loss in the first quarter of this year. That number compares to $2.7-billion in total losses in Q4 ’09.

The company is aiming to breakeven by the end of 2010.

The news comes today as the top U.S. automaker, General Motors, released earnings for the first quarter of 2010. The company reported a net profit of $865-million in the quarter, marking the first profit in many fiscal quarters.

The Canadian government announced plans today to offer GM, Chrysler up to $4 billion in bridge loans to continue operations.

Under the announced plan today, the Canadian government will earmark $1 billion for Chrysler, $250 million of witch will become available immediately, and an additional $500 million by sometime in April. Part of the deal, Chrysler must interest notes equal to 6.67% of the aggregate loan.

GM would receive the remaining $3 billion. Read the full story

GM CEO Rick Wagoner, 56, has just announced he will be stepping down from his post because of pressure from the Obama administration. Wagoner has worked at GM during his entire career, joining GM’s treasury department in 1977 immediately following earning his MBA from Harvard.

GM and Chrysler have already received $17.4 billion in loans since December 2008. GM and Chrysler collectively say they need an additional $21.6 billion in loans just to survive. Ford says it will not require any more government help to wither out the financial crisis.

The news comes as Obama is set to unveil his new round of emergency government bailout loans for the auto sector Monday 11AM EST. Obama says the big three have not yet done enough to restructure.

It is currently unclear as to who will replace Wagoner.

Update: GM will terminate various brands over time including Saab and Saturn. GM also announced it will reduce dealers to 4,000 from 6,000 over the next 5 years. There are also concerns GM may leave Canada, but Canadian PM Stephan Harper said he’s confident that will not happen as his government has had close talks with GM. GM is also seeking help from Sweden and Germany.

GM and Chrysler are now asking the U.S. Fed for an additional $21.6 billion. GM says the company needs as much as $30 billion in new aid by 2011, and needs $9.1 billion right now. Chrysler said it needs $9 billion right now as well. Both companies have announced new cost cutting measures that include new massive job cuts. GM says it will cut 20,000-30,000 jobs in the U.S. by 2011, bringing the total job cots to about 30,000 with Chrysler over the next couple of years. GM says the new aid is required due to very weak sales. Read the full story

The Bush Administration today has approved an emergency bail out for the Big 3 US Automakers to the tune of $17.4 billion. Bush said “it would worsen a weak job market and exacerbate the financial crisis,” if a bailout was not implemented. President-elect Barack Obama also praised the bailout. $13.4 billion will become available within the next two weeks or ago, while the remainder will become available in Jan. There are reports an additional $4 billion could become available in Feb 09. GM will get the most out of the plan with $9.4 billion; the rest will be split evenly between Ford and Chrysler, who will get $4 billion each. The Big 3 need to particularly reduce labour costs and build better vehicles to sustain their companies in the future, otherwise, we run the risk of more bailouts, and ultimately the insolvency if these fundamental problems are not addressed. I personally believe we all needed this bailout as the collapse of the automakers would have caused significant and irreversible harm to everyone particularly in the US and Canada. Please see this report that highlights possible job losses if the automakers went under, and my article that highlights my thoughts on a GM bailout.

Ottawa has announced it will pledge up to $2.8 billion in aid to the auto-sector in Canada, a proportional amount in terms of Canada’s 20% North American auto sector share. However, there is one big catch. Washington must budge first for those funds to become available. Canadian Industry Minister, Tony Clement, said at a conference the other day “we expect the American administration to announce something very soon,” and he also said that he believes a US bailout is imminent. Most recently, yesterday, the US Congress failed to pass $14 billion bailout, and GM subsequently announced massive production cuts that saw the temporary layoff of 3,000 people. I do believe a US bailout will come very soon, but the question remains, can GM, Chrysler, and Ford remain competitive and cut costs, or is this bailout going to lead to a cyclical pattern of more bailouts? The question remains, but I know one thing for sure, the people and the economy will suffer a great pain if they go under, and that’s why there will be a bailout.

US Congress is set to vote on the $25 billion bailout for the top three automakers that is aimed to help stabilize the American auto industry later today starting at 10am. It is believed the movement doesn’t have enough support for the bill to be approved. The automakers have warned that if they don’t get help soon and if they all were to fail, the government would lose more than $150 billion in annual tax revenue and aggregately, more than 3 million people would lose their jobs.

Not everyone is on board with the bailout. People argue that these companies made bad business decisions; therefore they should be allowed to fail. Wyoming Republican Mr. Enzi doesn’t believe the big three should be bailed out and was quoted as saying that the bail out would be “another check issued by the taxpayer to solve a long-term problem with a short-term solution.” The Bush Administration supports helping the big three with the previously approved $25 billion fund, but not with new funding. Out of the big three, GM desperately needs cash now the most as it’s about to become insolvent by about March 09 which will have a profound impact on everyone if it goes under. GM also recently sold all of its stake in Suzuki to get much needed cash back. Chrysler is likely the best suited as it actually has about $11 billion cash on hand.

US House Speaker Nancy Pelosi has announced today that the big three Detroit automakers will be getting part of the $700 billion government bail out. Pelosi did not confirm how much money the companies will get but they are asking a combined $25 billion in loans. The amount of money that will be given to GM should be sufficient to bailout GM, which desperately needs a cash infusion or it will run out of money entirely by early March 2009. Pelosi said that the big three would need to develop better, more fuel efficient vehicles and restructure “to ensure their long-term economic viability” as a condition part of the deal.

United Auto Workers President Gettelfinger told reporters that automakers are struggling because of problems beyond their control, including the credit crisis. He also said that union labor costs are not the main problem and they only account for up to 10% of any vehicles cost made by the big three (GM, Chrysler, Ford). I personally believe the union is cutting into their bottom and line and making them less competitive because the other foreign automakers don’t pay nearly as much in total labor cost per vehicle.

I said it before that GM will be bailed and that we should bail GM out because if it fails, a catastrpohic chain reaction will hit the economy hard that could eliminate 1 million jobs alone. The Center for Automotive Research has also warned that the collapse of the Big Three could eliminate up to 3 million jobs and more than $150 billion in tax revenue for the US Fed over the next three years. However, all 3 wouldn’t fail, but even GM alone would hit everyone hard, especially the people of Detriot, which could result in more foreclosures. Scary stuff.

GM is burning cash every month and needs some serious cash to fund operations. That is why it could have really used the $10 million loan from the Fed it was seeking that never materialized. That money GM could have also used to acquire Chrysler. GM still remains as the most likely choice for a Chrysler merger, which would significantly benefit GM because Chrysler actually has a lot of cash on hand. Despite the loan being turned down, GM is now likely trying to be classified as a Bank Holding company so that it can purchase commercial paper from the Federal Reserve’s $700 billion bailout fund.

As world economic volatility and the credit crisis remain active, GM is tightening various restrictions including new financial restrictions from its “captive arm” that is suppose to help dealers financially to sell vehicles. Because of the credit crisis, GMAC (wholly owned subsidiary of Chrysler & GM, 51% and 49%, stake respectively) lost $2.5 billion in Q3 of which $194 million was from auto financing. As GM tries to get cash, it has introduced new GMAC terms that will likely have very negative consequences for dealers and lead to closures. Under the new terms, GMAC will only approve loans from people with a credit score of >700 and it will fund less of the principal meaning buyers will have to put up higher down payments. In addition, GMAC is demanding dealers begin immediate repayment car loans, even on 2007 vehicles that are still on the lot. The biggest concern here is as GM vehicles become more expensive (and people are not spending their cash), sales for dealers will dramatically drop, and dealers could become insolvent because of the new loan repayment terms.

Adding further global economic fears, there are yet more job losses. Toymaker giant Mattel has announced it is reducing its cmanagement and professional staff by 8%, or by 1,000 people. Mattel’s sales have increased by 6% to $1.95 billion in Q3, though the toy maker is facing increases costs including recent costs with the Chinese lead problem in toys. Mattel’s stock also is tanking. Additionally, the largest US mutual fund company, Fidelity, has also announced it is slashing 1,300 jobs. Fidelity remains a strong investment company and has earned a $30 billion net gain up to this point in 2008.

AMD also announced today it is cutting 500 employees to cut costs and return to profitability. The AMD stock subsequently tanked.

Also, Porsche’s sales recently dropped by almost 70% in October 08.

It is very clear the financial crisis is impacting everyone, so hold onto your money because its going to get worse before it gets better anytime soon.