This story has been updated to reflect Chrysler’s official confirmation it will pay off its federal loans.
Treasury Sec. Timothy Geithner will take a tour of Chrysler’s Jefferson North Plant today, but it will be more than just a friendly visit, the automaker today announcing it plans to pay back its remaining federal bailout loans by the end of June.
Sergio Marchionne, CEO of both Chrysler and its Italian ally Fiat, has been lining up alternative – and less expensive funding – in recent weeks. With Geithner at his side during the visit to the Detroit plant, Marchionne is expected to provide further details about the plan to repay $5.8 billion to the U.S. Treasury and another $1.7 billion to the Canadian government.
The move will permit the Italian side of the alliance to increase its stake in Chrysler to 46%. Marchionne has already indicated he expected to meet a final hurdle set under the bailout that would permit Fiat to bump its holdings to a majority 51% by the end of this year.
It’s likely Geithner will at least touch on the early payoff of Chrysler’s bailout during a Thursday afternoon speech to the Detroit Economic Club – though the overall economy was planned to be his primary topic. The improving fortunes of Detroit’s Big Three has helped the Obama Administration quell early criticism of the costly bailouts of Chrysler and General Motors.