Monday, December 15, 2008

Dealers pitch in to help Chrysler


Chrysler debuted the Dodge Ram with a cattle drive in downtown Detroit at the auto show media preview in January. For next month's show, the automaker is asking its dealers to help defray costs.

Dealers pitch in to help Chrysler

Automaker asks retailers to help pay for Detroit auto show


Chrysler LLC, which is quickly running low on cash, is cutting back its spending on the North American International Auto Show next month and asking local independent dealers to pick up some of the tab, the Free Press learned Friday.

After Nissan Motor Co. said in November that it was pulling out of the Detroit auto show to save money, Chrysler officials went to local Chrysler dealers for help, according to several people briefed on the discussions who did not want to be identified.

Dealers are trying to do their part to help Chrysler, which sells Chrysler, Dodge and Jeep brand vehicles, these people said.

"Chrysler has asked retailers in the area to help ... defray some of the costs," one person said. "It's bad times -- what are you going to do?"

"We're trying to help everybody. Everybody is coming to the party," another person said. "We've got to do what we got to do."

Chrysler spokesman Rick Deneau declined to say how much money the automaker is spending at the show this year or how much the dealers are being asked to contribute.

"Certainly, it shouldn't be a surprise that we are planning to spend less in Detroit this year than in years past -- that's just common sense," he said. "We wouldn't be asking the dealers for any extraordinary share."

Chrysler CEO Bob Nardelli has said Chrysler plans to seek $4 billion in new concessions from all constituents, such as suppliers and dealers, over the next three months. Dealers are expecting to contribute up to $1 million to the auto show.

Traditionally, Chrysler's exhibits at the Detroit auto show have been paid for by the manufacturer and Chrysler, in particular, has been known for its over-the-top show antics, including a January cattle drive through downtown to debut the redesigned Dodge Ram.

"They've gone back to the old way that auto shows were done," one person said, referring to the days when dealers paid for the show.

While the Detroit auto show has become a media spectacle during which automakers from around the globe debut new vehicles, the show also plays a role in local car sales. Dealers are motivated to help ensure the show continues because many of the people attending the show during the public days are looking to purchase new vehicles soon.

"We're caught between a rock and a hard place," one person said. "It's imperative that we have an auto show."

Chrysler is teetering on the edge of financial collapse. It has asked Congress for $7 billion in bridge loans, warning that without immediate help, its cash could fall below the level necessary to sustain the company through the first three months of 2009.

The automaker says it faces $11.6 billion in expenses during the next three months, including $8 billion to suppliers. A plan to help the automakers died in the U.S. Senate.

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