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Chrysler closing all 30 plants for one month
KFYI Radio Phoenix ^ | Dec 17, 2008 | Unsigned

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 The letter said about $60 million a day is being withdrawn from the account, which is "well above our historical daily advances."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.


TOPICS: Breaking News; Business/Economy; Government; US: Michigan
KEYWORDS: automakers; begthreebig3; bigthree; chrysler; detroit; ford; gm
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To: Kieri
Chrysler dealers say they have many willing buyers but are unable to close deals due to lack of financing.

But I thought Paulson said the banks were all fixed now!

81 posted on 12/17/2008 3:39:26 PM PST by TenthAmendmentChampion (Join us on the best FR thread, 8000+ posts: http://www.freerepublic.com/focus/chat/1990507/posts)
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To: Kieri
Kieri,

Good to hear from MI and what the local media says.

For those of us living here, the buzz has been Chrysler will not make it, if anything the money will be for the orderly dis-assemblage of them. Who gets the Ram Truck, who gets Jeep and who gets the Mini-Van ( the big prize IMHO).

The big looser in this? VW.....

Their highly rated van (more than Chrysler products) are made on the same assembly line.

82 posted on 12/17/2008 3:40:28 PM PST by taildragger (Palin / Mulally 2012.....)
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To: MississippiMan

The cash management fund is obviously the dealer’s money. My understanding is that debits and credits are constantly flowing back and forth between mfr and dealer, and thus it works smoother if the dealer simply leaves funds in the cash mgmt account that Chrysler can deduct from when cars are purchased or add to when cars are sold that are Chrysler-financed.


83 posted on 12/17/2008 3:40:52 PM PST by Elpasser
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To: MississippiMan

No, the floor plan is funded by dealer deposits in a “floor plan fund”, and the dealers are withdrawing their deposits.

Well, duh. Chrysler has been crying bankrupt for months - would you lend them money?


84 posted on 12/17/2008 3:43:28 PM PST by patton (Vista malware delende est - Norton Antivirus)
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To: DonaldC
"But yes, the above is my contention. Even the CEO of GM said that pay and benefits to current employees is on par with foreign auto makers and their employees in this country. Don’t confuse total overhead expenses with employee pay and benefits."

Don't let a little thing like facts stand in the way! LOL

I think that under the more recent GM contracts, worker compensation comes to about three dollars more an hour than their foreign counterparts. It's not huge sums of money.

85 posted on 12/17/2008 3:48:33 PM PST by Texas_shutterbug
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To: xJones

No, I must as smart as you. LOL

I agree with your comments. They seem to be fabian socialists one and all.

We create the problem and then promise you we’re the ones to rescue you.

And Bush didn’t out them for it. That’s a shame...


86 posted on 12/17/2008 3:49:05 PM PST by DoughtyOne (I see that Kenya's favorite son has a new weekly Saturday morning radio show.)
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To: Buckeye McFrog
Lots of guys were getting 13-week vacations at 95% of their base pay.

Geez, and the union workers wonder why the real 'working man' hates their guts and doesn't want to bail them out.

87 posted on 12/17/2008 3:53:34 PM PST by radiohead (Buy ammo, get your kids out of government schools, pray for the Republic.)
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To: taildragger

I used to live 20 minutes north of the Chrysler HQ in Auburn Hills. So much of the local economy was automotive-related I tried to keep up on the news. I can’t help but remember the day Chrysler gave the UAW EVERYTHING that they asked for during contract talks. EVERYTHING, they didn’t even negotiate. You could hear the disbelief in the reporters’ voices, wondering “what were you thinking??”

Now we know. They weren’t thinking. And now they want the US taxpayers to bail them out of this huge mess.


88 posted on 12/17/2008 3:54:44 PM PST by Kieri (The Conservatrarian)
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To: DoughtyOne
You watch. The day Obama is sworn in, there won’t be any more bad news. Soon car sales will pick up, housing will firm up and everything will be wine and roses.

Just like it was all through the Clinton administration...nothing but good news. All lollipops and roses.

89 posted on 12/17/2008 3:56:18 PM PST by pgkdan
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To: Rutles4Ever
they’re not going to automatically go to the dealership to get raped by their in-house labor charges

I haven't been to a dealership in 20+ years, other than to buy a small part or two. I got me a private mechanic who is doing well for himself and for me. Location: top secret. Don't try to tail me, either.

90 posted on 12/17/2008 3:56:32 PM PST by Right Wing Assault (What's Obama's Secret?)
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To: Rutles4Ever

I know a guy that works for a supplier to the big boys. Last week the owner said, “Bye. See you January 15.” I guess he felt this coming, too.


91 posted on 12/17/2008 3:58:28 PM PST by Right Wing Assault (What's Obama's Secret?)
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To: TenthAmendmentChampion

One extra week, wow

kinda like rubber necking a wreck on the inteerstate...


92 posted on 12/17/2008 3:59:36 PM PST by hadaclueonce (shoot low, they are riding Shetlands..)
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To: TenthAmendmentChampion

Related - “Chrysler Suppliers are Demanding Cash”:

http://www.freerepublic.com/focus/f-news/2148281/posts

If they’re not building cars, they don’t have delivery trucks showing up at the docks looking for cash.


93 posted on 12/17/2008 4:00:36 PM PST by DuncanWaring (The Lord uses the good ones; the bad ones use the Lord.)
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To: TenthAmendmentChampion
But I thought Paulson said the banks were all fixed now!

As in, "Where in a real fix now!"

94 posted on 12/17/2008 4:01:07 PM PST by Right Wing Assault (What's Obama's Secret?)
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To: Kieri
"Meantime, Chrysler is still waiting for word from the White House on whether it will receive billions of dollars in rescue funds needed to help the automaker get through the rest of 2008.”

There's the money quote. And a return to work date of Jan. 19th will be just in time to make the messianic noOb their savior.
95 posted on 12/17/2008 4:01:44 PM PST by Liberty Valance (Keep a simple manner for a happy life ;o)
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To: Lurker

>>Just file Chapter 11 and be done with it.

L <<

I don’t believe the Dems will allow that since a bankruptcy filing would reopen the union contracts...


96 posted on 12/17/2008 4:02:14 PM PST by gondramB (Preach the Gospel at all times, and when necessary, use words.)
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To: TenthAmendmentChampion

“Does anyone know if the workers get paid anyway?”

UAW employees get 95% (!!!) of thier base pay.
All other employees get SCREWED...


97 posted on 12/17/2008 4:04:19 PM PST by tcrlaf (You Voted DEMOCRAT-You'll Look GREAT In A Burqa!)
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To: TenthAmendmentChampion
Does anyone know if the workers get paid anyway?

According to CNBC, UAW workers get 95% of normal wage during the shutdown.

98 posted on 12/17/2008 4:04:33 PM PST by Pearls Before Swine (Is /sarc really necessary?)
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To: DuncanWaring
Wow, Chrysler has to pay cash?

I worked for Montgomery Ward at one time and the company that makes a famous blue jean brand demanded pre-payment for all invoices.

99 posted on 12/17/2008 4:05:42 PM PST by TenthAmendmentChampion (Join us on the best FR thread, 8000+ posts: http://www.freerepublic.com/focus/chat/1990507/posts)
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To: TenthAmendmentChampion

Such a pity...maybe they should close the plants permanently.


100 posted on 12/17/2008 4:07:01 PM PST by rabscuttle385 ("If this be treason, then make the most of it!" —Patrick Henry)
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