| This Day in Auto History: 12.22.1896 |
Thursday, December 18, 2008
Chrysler Financial May Curb Loans as Dealers Tap Cash (Update2)
By Greg Bensinger and Mike Ramsey
Dec. 17 (Bloomberg) -- Chrysler LLC’s credit arm said it may temporarily halt the loans used by dealers to buy vehicles as the retailers pull money from an account that helps finance their borrowing.
Losing access to the lending, known as floorplan, from Chrysler Financial would be a blow to dealers struggling with a 28 percent plunge in 2008 U.S. sales. Dealers put money into the account to pay off loans early. They get a 2 percent bonus if the cash stays in the fund for a set period of time, while still being able to pull it out and make scheduled repayments instead.
Almost $60 million a day is flowing from the account, a rate “that is troubling,” Chrysler Financial Chief Executive Officer Thomas Gilman wrote to dealers on Dec. 12. More withdrawals may “force us to suspend wholesale financing.”
“All the dealers got scared when Chrysler started talking about bankruptcy in front of Congress, and they pulled their money out,” said Dick Mullen, a Chrysler dealer in Southold, New York. “If a dealer can’t get floorplan from Chrysler there’s almost nowhere else to turn. It’ll be a disaster.”
Withdrawals from the fund have totaled more than $1.5 billion since July, Gilman wrote. That adds to the cash squeeze at Chrysler and Chrysler Financial, which are both owned by New York-based buyout firm Cerberus Capital Management LP.
“Chrysler Financial finances 75 percent of all vehicles shipped to U.S. dealers and will continue to support our dealer body with uninterrupted wholesale financing,” Amber Gowen, a company spokeswoman, said today.
Pressure on Chrysler
Chrysler is being pressed by a small number of suppliers for payment in advance as it seeks federal assistance to avoid running out of cash as soon as year’s end, people familiar with the matter said last week. Auburn Hills, Michigan-based Chrysler has said it needs $4 billion to operate to March 31.
Gilman said Chrysler Financial has been in talks for more than a month with the U.S. Treasury Department and the office overseeing the Troubled Asset Relief Program to help “break the logjam” in the market for so-called asset-backed securities such as car loans.
That may help Chrysler Financial “in the form of liquidity to fund wholesale and retail loans,” Gilman wrote.
Auto lenders raise capital by issuing securities backed by car loans, enabling them to offer more credit.
Separately, Chrysler said yesterday it joined a financing program with about 2,500 credit unions to offer low-cost auto loans to buyers in 12 states. Under the program, consumers are eligible for rebates of as much as $1,000.
The credit unions have said they have pledged as much as $12 billion to the program, which runs to June 30. U.S. industrywide auto sales fell 16 percent through November.
Ontario leader says more auto bailouts to come
Associated Press, 12.17.08, 12:44 PM EST
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Canada's potential $2.8 billion rescue package for the U.S.-based automakers is just the first of what could be several payments, Ontario Premier Dalton McGuinty says.
McGuinty said Wednesday the 3.4 billion Canadian dollars promised jointly by Ottawa and Ontario to the Detroit Three is simply a lifeline to sustain the industry. General Motors Corp.
McGuinty warns it's too early to speculate on how high the aid could go because the province is still assessing documents and plans.
His comments come one day after Economic Development Minister Michael Bryant called the possible loss of the auto industry in Ontario a "doomsday scenario" that cannot come to pass. Canada could lose more than 580,000 jobs within five years if Detroit's Three automakers go out of business, according to a Ontario government commissioned report.
Last week, Ottawa and Ontario announced they would provide the equivalent of 20 percent of whatever emergency aid Washington provides - a figure proportional to the number of vehicles produced in Canada.
Real-Time Quotes
Bush administration officials were still evaluating options and attempting to avoid a disorderly bankruptcy of the companies. Congress failed a week ago to reach consensus on a $14 billion aid package for struggling GM and Chrysler.
But the Canadian aid for the automakers won't come until the U.S. makes its plans known.
Governments in Canada have helped the U.S automakers before. Ottawa and Ford Motor Co. announced in September that a new research center for environmentally friendly technologies will be launched in a government partnership that includes up to 80 million Canadian dollars ($66 million) in government funding.
Ontario has helped the auto sector with a 500 million Canadian dollar ($413 million) fund that was designed to attract and keep jobs in the province.
Canada is attractive to the U.S. automakers because the government provides universal health care to all Canadians, unlike in the U.S. where the automakers subsidize workers' health care tabs.
This Day in Auto History:
12.18.1898
Theodor Parsons Hall, develop of the Hall flying automobile, is born in Wallingford, CT
12.18.1919
Racer Henri Fournier dies in Paris, France at age 48
12.18.1941
Racer Wayne Baker is born
12.18.1955
Racer Ted Musgrave is born in Franklin, WI
12.18.1991
Racer George Abecassis dies in Ibstone, Buckinghamshire, England at age 78
2008 Dodge Challenger SRT8 HHP/BES 426 1/4 mile Drag Racing timeslip specs 0-60
| 1/4 Mile ET: | 11.791 |
| 1/4 Mile MPH: | 117.380 |
| 1/8 Mile ET: | 7.570 |
| 1/8 Mile MPH: | 92.300 |
| 0-60 Foot ET: | 1.709 |
| Temperature F: | 0.0 |
| Density Altitude (DA): | DA Calculator |
| Timeslip Scan: |  |
| Car Make: | Dodge |
| Car Model: | Challenger SRT8 |
| Car Type: | HHP/BES 426 |
| Car Year: | 2008 |
| Driver: | Trojan |
| E-Mail: | Private |
| Videos: | Challenger-SRT8 Videos |
| Web Site: | |
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| Horsepower @ wheels: | Click HERE to estimate |
| Torque @ wheels: | 0.00 |
| Dyno Type: | |
| Dyno Graph: | |
| Classifieds: | Challenger-SRT8 For Sale |
| Parts: | Challenger-SRT8 Parts
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Chrysler shutdown to idle 46,000 for month
A signal of dire future if no auto aid comes?
Chrysler LLC announced Wednesday it would shutter all 30 of its factories for one month and idle 46,000 workers, while General Motors Corp. said it was delaying a key supply plant for the Chevrolet Volt, as both attempted to avoid imminent collapse while the Bush administration pondered a rescue.
Chrysler's move signals the first of a cascade of dire actions that will result if the automakers don't receive government aid, a person close to the situation said. Following a 47% decline in sales last month, some Chrysler plants are to be closed until February.The Wall Street Journal reported late Wednesday that merger talks involving GM and Chrysler had resumed. The talks were suspended in late October when the Bush administration expressed reluctance to provide money for a merger that could result in thousands of jobs lost.
But the Journal said Chrysler's majority owner, Cerberus Capital Management, under pressure from some members of Congress to put more money into Chrysler, restarted the talks and indicated willingness to surrender part of its stake in the company.
Chrysler and GM have said they need at least $8 billion by the end of the month to avoid bankruptcy and at least $14 billion to get through the first quarter.
"It's clear that the automakers are in a very fragile financial condition, and they're taking steps to deal with it," said White House spokeswoman Dana Perino. "We're aware of their financial situation and are considering possible policy options to provide assistance in an appropriate way. As we've said, a disorderly collapse of the auto industry should be avoided."
While President George W. Bush and other officials have promised to act since the Senate blocked a rescue last Thursday, auto dealers and other industry supporters say the wait is damaging the rest of the economy.
"Manufacturing makes up the backbone of this economy, and that backbone is being broken," said Sen. Debbie Stabenow, D-Mich. "This administration must act now to preserve the middle class and protect our economy."
"Time is of the essence," said Annette Sykora, chairwoman of the National Automobile Dealers Association. "A lot of people are depending on the White House to provide the bridge loans to prevent a collapse of the auto industry. We need action now."
Chrysler said Wednesday that it would double a planned shutdown of all 30 North American plants from nearly two weeks to one month -- starting Friday through Jan. 19 -- citing sluggish sales. Chrysler said a lack of consumer credit had kept even willing buyers from closing on sales over the past couple of months.
"The dealers have stated that they have lost an estimated 20% to 25% of their volume because of this credit situation," the company said in a statement.
Chrysler spokeswoman Shawn Morgan said the Windsor minivan plant and Detroit's Conner Avenue sports car assembly plants are to be closed for the entire month of January. Both Toledo Jeep plants are to be closed until Jan. 26.
Chrysler's plants typically are shut down from Christmas Eve through New Year's Day. This year, they already were scheduled to be idled from Dec. 22 through Jan. 2.
Workers are to be considered laid off for the additional two to four weeks their plants are shut down.
"It comes as no surprise to me," said Eddie Gordish, a skilled trades worker at Jefferson North Assembly in Detroit. "All of a sudden, everything seems so crazy, so dire."
Meanwhile, GM said it was temporarily halting work on a new engine plant in Flint that is slated to build four-cylinder engines for the Chevrolet Volt electric vehicle and Chevrolet Cruze compact car. GM said the move did not change the deadline for building the Volt in late 2010, and would save money on construction materials in the near-term.
"It's temporarily on hold as we assess our cash situation," said GM spokeswoman Sharon Basel. "I don't think it's a surprise that we're studying and reviewing everything given the position we're in."
Ford Motor Co., which isn't seeking immediate federal aid, also said Wednesday that it would add an extra week to its two-week holiday shutdown at 10 North American plants, with the exception of two plants, which build the F-150 pickup.
GM announced plans to build the $349-million engine plant in Flint in September and told Congress it was spending $758 million on developing the Volt and its engine technology through 2012.
Both the Volt and the Cruze, a sedan expected to get 40 miles per gallon, have been touted by GM as examples of its commitment to more fuel-efficient models. The delay by GM follows word from Toyota Motor Co. on Monday that it was halting work on a Mississippi factory that would have built a new version of the Toyota Prius hybrid.
"These delays due to a cash crunch make it clear that without federal investment, the green revolution could come to a screeching halt," said U.S. Rep. John Dingell, D-Mich. "The sooner we get this bridge loan to Detroit, the better chance we have of getting more green cars into showrooms quickly."
Wednesday, December 17, 2008
(Possible) China Buyout Watch: Chrysler And Great Wall
By Bertel Schmitt
December 17, 2008 -
Two weeks ago, Chrysler terminated its joint venture talks with Chery. This doesn’t stop Chrysler from talking to the Chinese. The talks go in two directions: One, Chrysler needs low cost cars, and the Chinese have them. Two, Chrysler is looking for a buyer, and a Chinese company may just have mercy and cash and take Chrysler off the sweaty hands of Cerberus. Hell, you never know. Now, Chrysler has been spotted chatting up Great Wall Motors, Gasgoo reports. Great Wall is known for its large portfolio of SUVs and MPVs. They also got into hot legal waters with Fiat who claimed that Great Wall’s Peri (called Jing Ling in China) is a copy of Fiat’s Panda. A court in Turin said Fiat is right and Great Wall is wrong. A copyright claim in China is slowly grinding through the wheels of the Chinese courts.
According to Gasgoo, Philip Murtaugh, Chrysler Asia CEO, went to inspect Great Wall Motor’s facility last week to look into the code-named CH041 model and CH031 hatchback, which could be the A-class model Chrysler needs. Murtaugh was supposedly satisfied with the two models. Great Wall Motor said the two parties will launch “CH031″ first if the projects fare well. The two automakers are still in talks and nothing is definite yet, said Great Wall Motor. If the models see the light of mass production, they will go on sale in overseas markets with the Chrysler label. A Chrysler China executive said Chrysler was in - duh - “a transitional period.” They might need Great Wall, one way or the other.
Chrysler latest Trademarks
| Serial Number | Reg. Number | Word Mark | Check Status | Live/Dead | |
|---|---|---|---|---|---|
| 1 | 78976488 | 3030758 | U C O N N E C T | TARR | LIVE |
| 2 | 78976487 | 3024822 | UCONNECT | TARR | LIVE |
| 3 | 78975421 | 2857019 | WHERE ADRENALINE AND TECHNOLOGY MEET | TARR | LIVE |
| 4 | 78972570 | | EXTRA CREDIT | TARR | LIVE |
| 5 | 78971401 | | COMPLETERENTAL | TARR | LIVE |
| 6 | 78951523 | | STARPARTS LITE | TARR | LIVE |
| 7 | 78938650 | | SNAKESKIN | TARR | LIVE |
| 8 | 78938042 | | TRAILHAWK | TARR | LIVE |
| 9 | 78920255 | | ROLLOVER MILES | TARR | LIVE |
| 10 | 78920215 | | DODGE CREW | TARR | LIVE |
| 11 | 78918584 | | DISCIPLINED PIZZAZZ | TARR | DEAD |
| 12 | 78907664 | | GREAT RIVER ROAD | TARR | DEAD |
| 13 | 78907244 | 3354295 | MYGIG | TARR | LIVE |
| 14 | 78907048 | | LATITUDE | TARR | LIVE |
| 15 | 78907019 | | LIBERTY LATITUDE | TARR | LIVE |
| 16 | 78877458 | 3420519 | NASSAU | TARR | LIVE |
| 17 | 78866661 | | TOMAHAWK | TARR | LIVE |
Chrysler LLC Latest Patents
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