It's time for Atlas to shrugg.
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 The letter said about $60 million a day is being withdrawn from the account, which is "well above our historical daily advances."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.
This is not good.
I know the first paragraph has a typo (it’s). Arrggh, but I didn’t write it.
Paging Lee Iaccoca white courtesy phone please
US Govt, learn to live with less money. We peons do.
I believe GM is paying their employees when they shut down some of their plants. I think it is in the contracts ...
This is gonna suck... I have a jeep in production...
Will they ever re-open? Maybe not.
L
Paging Cerberus....
Anyone understand the floor plan issue they’re talking about? In addition to Chrysler floor planning the cars for the dealers, do they also provide the equivalent of “floor planned operating cash?”
MM
As to whether the employees get paid, I think it depends on their contract. My guess would be they do get paid, but at reduced wages.
If so, Chaptrer 11 will solve that.
It's time for Atlas to shrugg.
They probably have an excess of inventory right now. I don’t see what the alternative is. If the media would quit playing up every tid-bit of bad news, things would turn around a lot faster. 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.
It’s not bad. Our Corporate company is doing the same thing for two weeks during the holidays. We have to use our vacation time and they will pay for usual holidays. Nothing new. I’m sure Union workers have alot of sick days and vacation days.
Bob Nardelli needs that as part of the $200 million he plans on walking out with just like he did at Home Depot.
“This is gonna suck... I have a jeep in production...”
Awwww
comeuppance
Just at the right time to turn the screws on Bush...
Meanwhile oil continues to be traded under production costs...
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