More Chrysler dealers could be facing the ax as GMAC – the new lending arm for the Michigan automaker – has suspended floorplan financing to several Chrysler dealerships. GMAC has given an unspecified number of dealers 30-days to shore up their finances or be forced to find a new lending company.
If those dealers earmarked for improvement don’t attract new investors or find other means of injecting new capital, they will be cut off from GMAC for their floorpanning needs. “This shouldn’t be a surprise,” a GMAC spokesman told Automotive News. “We said we would take 180 days to evaluate dealers on their individual creditworthiness.”
Although GMAC and Chrysler are keeping tight lipped about how many dealers are being suspended, The Wall Street Journal is reporting about 80 Chrysler dealers are facing the boot. Of Chrysler’s 2,400 remaining dealers, roughly 60 percent applied for wholesale financing through GMAC. About 6 percent of those dealers that applied for financing were put on suspension.
During its time in Chapter 11 bankruptcy, Chrysler was able to shed 789 dealers.
Although it’s possible those dealers left behind by GMAC could find new lenders, it remains highly unlikely those 80 dealers will find new lenders. Credit markets remain tight, with those lenders with money reluctant to hand out cash to companies in the automotive segment. If no new money can be found, Chrysler could be down to just 2,320 dealers.
06/25, 3:58 PM
posted by:
mayer_ray_nagin
This is all a big scam, and the guy in the video below sums up how most of us feel …
……. http://www.youtube.com/watch?v=MoAyBb8D5GU
06/25, 4:47 PM
posted by:
johnnycanuck
I always wondered what happened to HemiRoadRunner.
06/25, 4:48 PM
posted by:
yarddog82abn
Well no $hit! GMAC and GM still have Exec. ties. Buddy’s looking after buddy’s, cut off the competition sources, and it’s better for…GM…. Someone had to make the decision, why ain’t any of the GM dealers having the same out come?
@ mayer_ray_nagin… as to the vidio…
Funny how it’s also easy to point out the fall guy, yet we all abuse the system but no one admits that they have. Worrying about the state of the economy is not going to help. This whole “Get Rich of die Tying” and “I needs to get mines, before you get your’s” mind set is what got us hear in the 1st place.
But thanks to the internet everyone can express their 1st amendment right.
I just prefer to be herd, then to listen….
06/25, 6:57 PM
posted by:
leftwingagenda
the chrysler situation is developing ahead of the gm situation, so who knows, you may very well see some gm dealers in the same boat…just because it isn’t happening right now doesn’t mean it won’t…chrysler dumped dealers before gm did, that didn’t mean gm wasn’t dumping dealers…
06/26, 10:31 AM
posted by:
bdizzlefizzle
@leftwingagenda, you’re spot on. GMAC will do the same thing to some GM dealers soon enough. They have no choice. They took on massive losses, and must right the ship. They’re controlled by Cerberus, so they must return cash to Cerberus, and that takes being tough on GM and Chrysler. Don’t forget, Cerberus just took quite a beating financially, so they must start getting serious returns from their big holdings.
Also, @yarddog, aside from learning how to spell, you also should study history. GMAC had ceased all financing of GM vehicle loans at the end of last year/early this year, and only started up again a few months ago. They actually paid GM dealers to place loans with other finance companies. That’s how much they were losing on each loan – they lost less by paying dealers to not take a loan than to take it. You think that didn’t hurt GM sales? No question, if buddies were looking out for buddies, that wouldn’t have happened.
This is business. Pure and simple. Not a game.
06/26, 1:28 PM
posted by:
yarddog82abn
@ dbizzlefizzle…
I know, but now that Chrysler has clear bankruptcy why dose GMAC cut them off?
Aren’t them now in a better position? It just seems funny to me…..
06/26, 3:55 PM
posted by:
bdizzlefizzle
This isn’t Chrysler, it’s independent dealers. And these dealers have weak financial positions, so GMAC is cutting them off because it can’t afford to lend to someone who can’t pay it back.