Yes, I fully understand the fundamentals of floor planning. I used to be in the consumer electronics business and did a lot of it myself. (I knew it was time to bail on the electronics business when I walked into Wal-Mart and they were selling one of my bestselling VCRs for $20 UNDER my wholesale cost.)
What I don’t understand is this cash fund they’re talking about being heavily withdrawn from. It sounds like—I could be way off here—the manufacturer, in addition to shipping cars on floor plan, has also made a fund available from which the dealers can draw “operating cash loans” of some sort?
MM
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?