The 1979 Chrysler Bailout Cost $1.5 Billion. Big Business Execs Pad Their Wallets With Government Funds While Social Programs Like Education Fall Off the Map.

The 1979 Chrysler bailout: Chrysler officials flocking to Washington is nothing new.

It was just thirty years ago when the company first went to Washington to beg the federal government for a quick fix bailout to prevent the company from going bankrupt.

In the late nineteen seventies, the Chrysler Bailout Cost third of the Big Three automakers saw its sales fall to under fourteen billion and needed government support to prevent itself from having to declare bankruptcy and fire thousands of people and sell off assets.

The United States Treasury and President Jimmy Carter said yes and not long after the United States Congress approved a $1.5 billion bailout of the automaker which would be repaid within four years of the loan guarantee.

Today, Chrysler is once again facing bankruptcy, and this time they’re asking the government for a lot more than one and a half billion dollars, as the company is currently seeking its third multi-billion dollar bailout in six months.

1979 Chrysler Bailout: Leading Up

Chrysler LCC is an American automobile company that was first established in 1925. On May 14, 2007 Chrysler announced that it sold 80.1% of the company to American private equity firm Cerberus Capital Management.

After that, the company took on a new name, ”The New Chrysler.”

American car companies have previously been developed without any regard for fuel economy, safety or emissions.

So, in the 1970’s, Japanese and European car manufacturers started to develop smaller, lighter engines that ran much cleaner and still produced enough power to move large automobiles.

1979 Chrysler Bailout: The Gritty Details

U.S. Anti-trust laws meant that each American company had to figure out how to solve this problem on their own.

At the same time, fuel prices were rising, and the 1973 oil crisis reduced the demand for the large, fuel guzzling automobiles America was known for.

Chrysler bought a 15 percent share of Japan’s Mitsubishi Motors and began selling re-badged Mitsubishi models in the United States.

In February of 2008, Chrysler announced that it would be reducing its product line from 20 models to 15 models.

This was an effect of the monetary problems they were having. In October of that same year, Chrysler announced a 25 percent cut (5,000) jobs from its workforce.

Governor Jennifer Granholm of Michigan announced that she had sent a letter to Treasury Secretary Henry Paulson requesting emergency funding for the Detroit Big Three Automakers.

The 1979 Chrysler Bailout Package

In 1979, The Carter administration jumped to save the failing automobile company.

Treasury Secretary G. William Miller produced a government bailout of 750 million dollars.

Chrysler is America’s third highest ranking automaker, and if they did not receive the bailout in 1979, they would have gone into bankruptcy which would have left thousands out of work.

Chrysler originally asked for a billion dollars, but the government gave them much less. The company had to borrow from private bankers.