Feb. 5 (Bloomberg) -- Chrysler Group LLC will continue pursuing loans from the U.S. Energy Department while the failure of companies that have borrowed from government programs may prolong the process, the chief executive officer said.
“I’m not ready to give up,” Sergio Marchionne, CEO of Chrysler, told reporters yesterday at the National Automobile Dealers Association convention in Las Vegas. “The department has not indicated an unwillingness to lend.”
Chrysler, majority owned by Fiat SpA, continues to hold talks with the U.S. about the program, which encourages production of fuel-efficient vehicles, Marchionne said. He reiterated that the amount that Auburn, Hills, Michigan-based Chrysler may be able to borrow has been reduced to less than the $3.5 billion the company sought last year.
“The due diligence process that they have inside the Department of Energy is one which is reflective of a series of concerns, part of which are maybe attributable to recent events and some of the deals they’ve done,” Marchionne said.
Ener1 Inc., the maker of batteries for electric cars that received a $118 million Energy Department grant to make electric-car batteries, last month filed for bankruptcy protection after defaulting on bond debt amid Asian competition. Ener1’s bankruptcy follows the failure of at least two U.S. government-backed renewable energy companies, solar panel maker Solyndra LLC and energy storage company Beacon Power Corp.
Marchionne plans to introduce compressed natural gas- powered vehicles in the U.S. to meet 2025 standards calling for the average fuel economy to rise to 54.5 miles per gallon. He said at the Detroit auto show last month that Chrysler plans to begin sales of natural-gas powered pickups to fleet customers as soon as this year.
“I can make them faster than you can think,” Marchionne said yesterday. “We’re going to start showing the product, and then we’ll see whether people will take them.”
The dealers association, based in McLean, Virginia, has said it expects attendance of more than 20,000 at its convention this year. Marchionne said in a keynote speech that Chrysler dealers are the “most profitable they have been in a decade,” without elaborating.
Chrysler’s dealer body is about 85 percent profitable now compared with 70 percent in 2009, Ralph Kisiel, a company spokesman, said in an e-mail.
Marchionne also is chief executive officer of Turin-based Fiat.
--Editors: Bill Koenig, Jamie Butters
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