|
And also this story:
Chrysler Warns Dealers About Loans to Fund Car Inventories
By NEAL E. BOUDETTE
DETROIT-- Chrysler LLC's financing arm has warned dealers it may have to temporarily stop loans that dealers use to pay for stocking vehicles on their lots as a result of a recent wave of withdrawals from a fund used to pay off those loans.
In a letter dated Dec. 12, Chrysler Financial Chief Executive Tom Gilman said dealers have been withdrawing up to $60 million a day from the fund, according to a copy of the letter that was reviewed by The Wall Street Journal.
More
Dealers familiar with the matter said they started pulling money from the "cash management account" because of fears that Chrysler's auto operations could be forced to file for bankruptcy. "Everybody is concerned about that," said one dealer who did not want to be named.
Chrysler Financial allows dealers to put money into the cash management account and pays them 2% interest. The money is then used to make payments on the loans dealers take out to buy new cars.
In the letter, Mr. Gilman said more than $1.5 billion has been withdrawn from the CMA fund since July.
"Continued significant levels of withdrawals from CMA could potentially force us to temporarily suspend wholesale funding," he wrote. He asked dealers not to withdraw "beyond what's absolutely necessary."
News of the letter was reported by Bloomberg News.
Suspending loans for purchasing new-vehicle inventories would be a tough blow for Chrysler. Dealers wouldn't be able to order cars and Chrysler's revenue could plunge, since auto makers book car sales when cars are shipped from plants to their dealers.
__________________
Heroes will be remembered, but legends will never die!! -The Sandlot...I know
In my garage:
2003 Ford Focus SVT EAP in Infa-red 1 of 101
1970 EL Camino 454 SS w/ 4 speed muncie Red w/ Blk stripes
2010 2SS/RS Camaro w/hurst 6 spd in black on black w/red rally stripes

|