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Published: Wednesday, 5/25/2011

Chrysler resurgent

For those of us of a certain age, there was a sense of dejà vu about Chrysler Group LLC repaying its government loans yesterday.

Wasn't it just the other day that then-CEO Lee Iacocca stood on stage, grinning broadly as he presented a huge signed check to pay off the last of the federal loan guarantees to Chrysler? Actually, that was 1983.

This time, CEO Sergio Marchionne took the bows. He used modern wire transfers to make Chrysler's payments of $5.9 billion to Washington and $1.7 billion to the Canadian government.

"We made a commitment to repay the U.S. and Canadian taxpayers in full, and today we made good on that promise," Mr. Marchionne said, in words uncannily similar to Mr. Iacocca's years ago.

Back then, they were loan guarantees, not loans, and the amounts were much smaller. Once again, though, a U.S. automaker given up for dead has been revived. Given Chrysler's broad presence in Toledo, that outcome is especially vital to this region.

In the quarter-century between its financial crises, Chrysler returned to its wasteful old-Detroit ways. Its acquisition by the German automaker Daimler in the 1990s proved disastrous.

This decade, the company fell into the lap of a venture-capital outfit that seemed to know nothing about the car business. Then, after a near-death experience and a carefully designed bankruptcy, Chrysler was rescued by the U.S. government and the Italian automaker Fiat.

For Toledo, a stable core corporation can be nothing but good news for Jeep. The outcome also is a tribute to President Obama, who insisted on bailing out Chrysler and General Motors when a chorus of Republican voices insisted that Detroit's "dinosaurs" be allowed to die.

As former Ohio Gov. Ted Strickland noted yesterday: "Anyone who says President Obama's decision to help the auto industry out is anything short of a success is crazy."

That doesn't mean that the good old days are back, or there's nothing but smooth sailing ahead. Chrysler is really not an independent company any longer, but virtually a division of Fiat.

The Italian automaker is slated to become majority owner of Chrysler before year's end -- a share that could rise to 76 percent. Mr. Marchionne saved Fiat seven years ago, before transforming a company that was once a joke into a powerhouse capable of rescuing Chrysler.

No man lasts forever, though, and neither do most corporations. Chrysler and Fiat both look relatively good now, after years of downsizing. Both offer some hot new vehicles. They also seem to have a healthy sense of perspective; they are never going to be Toyota or GM, and they aren't trying to be.

The real test, however, will be whether Chrysler and Fiat are still around a decade from now, when Mr. Marchionne may be gone, and global competition is likely to be keener then ever.

For now, it is satisfyingly clear that reports of Chrysler's demise were, once again, premature. Toledoans should hope this will be a continuing trend.



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