Comments on: Chrysler Financial secures $24 billion credit line

By: jayjc08

jayjc08 — Tue, 05 Aug 2008 02:13:17 +0000

beatusmongous- Yeah, that was definitely the story I was thinking of. That’s pretty unfortunate, I hope any future promotions, or work in general, goes down a better way.

By: brassmonkey

brassmonkey — Mon, 04 Aug 2008 22:08:26 +0000

Key word, GROSS EARNINGS…

By: brassmonkey

brassmonkey — Mon, 04 Aug 2008 22:07:55 +0000

They got $24bn instead of the $30 bn “due to conditions in the credit markets and changes in the company’s retail strategy.”
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Can you smell the BS? They got declined the 30, and mortgaged the ANTICIPATED gross earnings as collateral for the loan and took the 24 instead. Whomever loaned the money believes in Chrysler and Cerebrus some, but not enough. And I wonder what rate they must be paying for that loan.

By: beatusmongous

beatusmongous — Mon, 04 Aug 2008 20:27:19 +0000

Jaycj08, I was probably the one that said the Chrysler dealers weren’t going through with the promotion. What had happened was that they were giving out Cristian Dior tote bags with every test drive, but when the boxes of totes arrived at the dealerships, the people stuck them in the corner and didn’t give them out. No one had a clue what was inside the boxes because they didn’t bother to open them. Instead, they stood outside and smoked.

I know about it because I was making the promotional spots for the giveaway, and we got into a pretty heated discussion when it ended. We did a ton of work, and gave a ton of coverage, and the dealers let the whole thing flop.

By: jayjc08

jayjc08 — Mon, 04 Aug 2008 19:10:40 +0000

You guys, this isn’t even going toward their vehicles. This is going to their financial business and dealership network. I’m curious, $24 billion to what, simply to support existing operations? If their going through money that fast… then theres something seriously wrong with their dealership network.

Here’s two recommendations, ones aren’t met by nearly any auto manufacturers besides Scion, Mini and in some cases Honda, but more evidently not by the Big Three:

-Produce just enough to meet demand. For example, once a GM vehicle like the older generation Malibu’s had taken off, and sales were *good*, they started making thousands more than needed. That’s part of the reason why their resale is so low, not necessarily because they don’t make good vehicles, but they make so many more than demand, and also why they have to sell so many to rental companies to break a profit. If there’s a demand for 30k a year, make 25k. They have to find a median where they take advantage of that opportunity, but don’t leave future owners in the dust with low resale and thousands of used vehicles on the market.

- Also, keep your dealerships competitive. For example, I heard someone mention on a past article that a Chrysler dealership had been giving out free stuff, but had given up on the promotion. Also, Toyota’s putting a lot of pressure on their dealerships to stay in shape, and the least competitive ones get cut or pressured even more. It’s unfortunate that it comes to the point where they wait it out, and then have to close thousands of dealerships because they had no reason to stay competitive.

- Keep Leases at a low. It was something that was risky in the first place, not JUST recently. Make customers more attracted to paying for a vehicle with cash, not cruddy credit or payments. Obviously, many people choose payments because they can’t afford the one time cost. That’s ALRIGHT, but many of those payments aren’t followed through, and leased vehicles loose their value extremely quickly. When millions of dollars of losses are attributed to leases, there’s a major problem. That only adds to the resale problem, with thousands more made than demand. There’s no reason that 30% of your vehicles are rentals, and another 30% are leased. It’s great that you can get a hold of a good rental, but it’s (not entirely, but) all the result of making more than demand.

By: chryslercurse

chryslercurse — Mon, 04 Aug 2008 19:00:16 +0000

I give them 6 months to burn through that money , this way the chinese can swoop in and snacth them up , trying to be in the car buisness, you stupid idiots at Cerebus (Brooklyn Mob)stick to what you know being crooks

By: anderson_b76

anderson_b76 — Mon, 04 Aug 2008 18:40:35 +0000

They are better off playing that money in a slot machine then trying to get a return on selling poorly engineered cars.

By: DeansterTJ

DeansterTJ — Mon, 04 Aug 2008 18:15:00 +0000

1.1 billion before amortization, interest, taxes, depreciation, etc. That’s like saying you made 24k this year – before you take into account the 10k on your credit cards and your 200k mortgage.

By: shaver

shaver — Mon, 04 Aug 2008 18:00:47 +0000

Country Wide just gave them a $24B ARM. Good luck when the rates reset.

By: megeebee

megeebee — Mon, 04 Aug 2008 17:54:51 +0000

Somewhere in Germany, Dieter Zetcshe and countless Daimler shareholders are heaving giant sighs of relief. I find it interesting that German ownership was supposed to “save” Chrysler. Now, the products they designed and approved for production are mostly responsible for this. At least they got out while they could. Not so good for American industry and employment, though.

By: xyunya

xyunya — Mon, 04 Aug 2008 17:45:48 +0000

Guys, did I mention that I do believe in Chrysler recovery (or something of that sorts)? This is serious scratch. FYI the value of Ford today (whole company) is less then 16 billion (for those of you who demand proof look at the link to yahoo financials).

http://finance.yahoo.com/q/ks?s=F