Chrysler Withdraws Energy Dept. Loan Application – NYTimes.com

DETROIT — Chrysler said on Thursday that it had dropped its longstanding request for $3.5 billion in federal energy loans after the Obama administration proposed tight restrictions on further aid to the company.

…But the decision may reflect a greater degree of political scrutiny of any additional financial assistance to the auto industry during an election year. Last winter, General Motors withdrew its own application for $14.4 billion in low-interest loans from the Energy Department after deciding it did not need the money.

Chrysler had considered the loans — intended to assist in the development of more fuel-efficient vehicles — to be an integral part of its operating budget.