Posted on 12/17/2008 2:31:26 PM PST by TenthAmendmentChampion
DETROIT (Reuters) - Chrysler which has over 100,000 US employees is closing it's plants for at least one month as the company does it's best to save money and sell off existing stock. Earlier in the day Chrysler LLC's finance arm has told dealers it may temporarily stop loans used by dealers to stock vehicles because the retailers pulled money from a fund that helps finance them.
Chrysler Financial Chief Executive Tom Gilman sent letters to dealers, dated Dec. 12, that asked them to refrain from withdrawing large amounts from a "cash management account" used to finance the loans, a source familiar with the letter said.
Withdrawals from the fund, which have totaled more than $1.5 billion since July, have caused a drain on Chrysler's resources and could limit the company's ability to offer financing to dealers to buy vehicles, according to the letter.
Chrysler Financial said in a statement that it finances 75 percent of all vehicles shipped to U.S. dealers and continues to support its dealer network with "uninterrupted" wholesale financing. The letter said about $60 million a day is being withdrawn from the account, which is "well above our historical daily advances."
Chrysler dealers were paid a bonus if they kept money in the account.
Talk about potential bankruptcy at Chrysler, which is seeking federal loans to survive through March, has spooked dealers, who withdrew heavily from the account in the past few months.
Chrysler has asked dealers to only withdraw "what is absolutely necessary" from the fund, according to the letter.
Chrysler, which has seen sales fall 28 percent so far this year, is also facing pressure from some suppliers who were insisting on being paid in advance for goods.
excess of inventory? no way!
i mean, my local dealer still having about a dozen unsold ‘07 vehicles on the lot isn’t an excess is it?
I love the sound of a gear reduction starter in the morning....brings me back to hotrod days
I love the sound of a gear reduction starter in the morning....brings me back to hotrod days
don’t make that withdrawl yet, your friend is exaggerating. that dealer can go to auction and get 27000 or so apiece. and that was just a laramie quad. 13,000 apiece is like 2007 laramie money. A 2008 used 2WD base model will get 17,500 or so. I have an account at Manheim, so that is not a book value, but an avg of what the vehicles sold for at the auction block in the last 30 days.
What the dealer is doing is “low balling” he is using your friends offer number in negotiations, but your friend hasn’t offered it yet. Put 80K on the table and see if you get 5 bills of sale signed by the Sales Manager.
Poor Detroit union workers, poor Hahbib, Fakesh, Bumbatta, Kaseem,Washington,Lamont,and the last few Bronskis.
Actually, this isn’t as bad as it sounds. They are already down 2 weeks for Christmas, so this is just an additional 2 weeks.
They'll also save money on the parts they don't have to buy for the cars they don't build.
And also on storage and shipping for the cars that they don't build that they couldn't sell anyway.
““All plants will be idled at the end of the shift on December 19. Affected employees will not return to work any sooner than Monday, January 19.”
Then what they are really doing is shutting down for 12 production days.
“So it’s a minimum of thirty days.”
Nope, 12 production days only. They are already scheduled for a holiday shutdown from Dec 24 to Jan 5. So, they miss 2 days in December and then two weeks in January.
You need a math class, 80,000 divided by 5 is 16,000.
Not this time. Don't delude yourself. This will not end soon, and it will get worse. Do whatever is necessary to be prepared.
Very good Dale. That’s amazing.
LOL, no, doesn’t sound like it to me. (poor dealer...)
I’m just waiting to see the acknowledged federal debt next year. It’s going to be shocking.
And then there’s the paper we’re printing that isn’t even on the books.
Look, I realize what you are saying is probably true. You just watch how the media plays it. They aren’t going to let Obama take the fall for any of this, and they will be shoveling continually to deflect any possible blame.
At some point, he isn’t going to be able to deflect, but they are sure going to do their best to absolve him for some of the worst policies this nation will every have seen implemented at is directive.
Frankly, he’ll have to go some to outdo some of what has already taken place, with dirty hands on both sides.
i don’t feel too bad for them, i’m still waiting for them to put some sort of a discount on them, they still have them at original sticker price. you’d think if they really wanted them gone they’d discount them some.
Over the years I have adopted a policy of frequenting our favorite restaurants at full price even though we do have coupons we could use. My dad tells me I’m wasting money when I don’t take senior discounts. I look at it this way. If I like the restaurant or business I frequent, I want it to remain solvent. I don’t mind supporting good businesses at full price.
To a point, I also like to get discounts during sales. I realize the owners can benefit from selling products at reduced prices based on increased sales. I still try to keep in mind how tough it is to run a successful business these days, and I’m willing to be supportive to help keep the places I like to frequent in business.
To a point, I agree that some reasoned discounts would help sell those vehicles.
Saturn is a division of GM, headquartered in Detroit.
Yes, they are a division of GM and they do not have union contracts and thus not in trouble.
But I had gone to Mervyn's before we knew they were closing, and they still had hundreds of pairs of shorts (this was in October!) My old boss at Montgomery Ward would have had my head if we'd been in that situation!
You know, I don’t like taking advantage of someone else’s situation either.
BTW: Congrats on your victory. Very glad to hear it.
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