Chrysler's Plans

[Dick]

http://www.allpar.com/corporate/cerberus/congress.html

[84ram]

I heard a news blurb early thurs morning on AM radio that said chrysler is planning to institute new rules and regs for dealerships after the first of the year which may cause many of them to have to close down because they won't be able to afford to do business any more...Something to do with fees that the dealers will be required to pay, such as being required to pay 10% of the cost (per moth) of each unit sitting on thier lot(s) until they sell them?.?. Holy crap!

[Walkercolt]

It will depend on who's carrying the "paper"(or floor plan) on the cars. If a bank is doing the loan, Chrysler couldn't care less if the cars sell or not. They've got their money. DCX holds the note on the "screaming car dealers", and they HAVE to turn cars in x-days or pay interest now. With car prices being what they are today, some big dealers have multi-millions in inventory, and have very little investment in them, just pennies on the dollar. GMAC used to do most GM dealer's "floor plans" and made lots of money at it. DCX can't afford to be a "banker" right now. GM and DCX are going to have to accept they are going to have a much smaller market share today. DCX isn't going to sell millions of vehicles a year anymore. They have to re-think their business model for what DOES sell, and walk away from some products. I won't talk about GM...they are dying, but the question is, is it murder or suicide?

[Century Cp Guru]

If Chysler Credit Floor plans a car You pay Interest every month from the day it hits the lot, and we saw there guy evry month checkin every vin on every car at the store and if a demo wasnt there the wanted to see it in short order.cars Ordered as sold are Given atime after delvery to dealer.

[Walkercolt]

Chrysler doesn't have the liquid assets right now to fund floor plans or dealer financing of vehicles. Yes, the dealer has to pay interest, but in some cases, that's all they are paying, and that is hurting Chrysler big-time. My boss that owns the hobby shop I work at part-time is a loan VP for the biggest bank in OK. They "floor plan" several car dealers in several states, and Richard goes and checks VIN's vs: titles at some of them monthly. He explained the whole process to me in detail, and why the car companies "front" some dealers money. Basically, it's the same reason Frito-Lay pays Wal-Mart for shelf space for Frito-Lay products.(vendor stocking) Wal-Mart doesn't pay Frito-Lay(or Wonder Bread, or soda pop companies, or in most states, beer distributors) a penny for thier products, until AFTER the product is sold. And those vendors PAY Wal-Mart(and other stores) for the space to place their products. With cars, it's high finace, and hardly makes sense to "normal" people. Wonder Bread and Frito-Lay know about how much bread to bake each day and how many bags of chips to make, so they'll sell in a day, or a week. Car makers don't know when people will stop or start buying cars. And old bread can be made into animal feed and chips will keep a month on the shelf...whadda ya' do with cars ya' can't sell(in 90 days)?

[Century Cp Guru]

WalKer for you info Chrysler Credit and Chrysler corp are Two different entitys. Chrysler Credit still Floor plans Cars.

[Dick]

It isn't Chrysler Credit, it's Chrysler Financial.

[Walkercolt]

I know, so is GMAC...kinda. So is GE Finacial, but many of the same people pull the same strings on the "Corporation" and the financing end. The money all comes from the same pair of pants, just different pockets. Just like you or I can have more than one bank account, and even one for our small business or to buy car parts with. When you peel enough layers of an onion, there is a center. You or I could go to an Ivy League Business school, and learn how to build the onion, if we were rich enough. It all amounts to a way to dodge some taxes, and keep from losing money if a "layer" goes bad.