Reasonable to expect Chrysler loan payback: Canada

Tue May 5, 2009 1:49pm EDT
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OTTAWA (Reuters) - It is reasonable to expect auto maker Chrysler will be able to repay the $2.42 billion it will receive from the Canadian government to help it restructure, Finance Minister Jim Flaherty said on Tuesday.

He told reporters the alliance with Italian car maker Fiat SpA should help Chrysler succeed.

"Do I have every confidence (the loans will be repaid)? No. I think it's reasonable if they are successful in their transformation that the loans will be repaid over time," Flaherty said.

"I'm happy that Fiat is part of the arrangement, because they have a business plan together with Chrysler. That will, for example, result in a smaller-car platform being marketed in North America, which Chrysler did not have, like Fiat has, and some technology also that Fiat has that Chrysler does not have," he added.

"So I think this augurs well for success in the longer term."

(Reporting by David Ljunggren; Editing by Jeffrey Hodgson)