Floor planning was part of the system which made this all possible.

The whole thing is a tangled web which is coming undone.

I maintain that one of the detroit 3 must die so the others may live. The pentastar was always my choice in that regard.

Nissan has been talking about entering the commercial market for some time now and picking up a 3/4 ton and one ton truck production, along with associated diesels would work out quite nicely towards that goal.

The new Ram is quite a nice truck (to my suprise), so I must admit that Nissan has to be the most likely choice to pickup that part of Dodge.

But they’d like to grab their Reeboks while they can.

One more Cerberus dealer rolled up the carpet yesterday in my neck of the woods. Think that leaves my metro area with 4.

Sincerely,
The car buying public

Cerberus basically got it in exchange for investing its purchase price into the company. Net net, Daimler didn’t end up pulling cash out of the deal.

Nissan will want the Dodge trucks and maybe want the new Chrysler EV’s. Nissan just announced their shut down their truck production in Mississippi, so they’ve telegraphed their punches.

It’s a tough balancing act for Cerberus. They need the dealers for their channel stuffing, but can’t stuff the channels if they can’t get the dealers to floorplan the inventory.

The dealers have long served as a dumping ground for the domestics to hide their inventory management problems, but that whole scheme is unraveling without the financing and dealer network to support it. Once something like this blows, it has to spiral downward very, very fast. They are really at the end of the line now, if this doesn’t stop.

Didn’t Daimler basically pay Cerberus to take Chrysler off of its hands? Can Cerberus even give the company away at this point?

Or – closed down for good then sold piece-meal. As in, the only thing worth selling will garner a little money to help pay down the debts incurred.

Jeep brand/Toledo plant/Wrangler specifically and maybe the V6 engine tooling for Wrangler.

Maybe the Mexican pickup plant and Hemi V8 plant IF Nissan can get it for a song.

Maybe the Viper plant and brand.

Minivans? Why? Better minivans are already out there – Honda, Toyota.

Chrysler is just about dead, and even the dealers apparently know it.

The dealership business model is built on leverage (borrowing). Instead of laying out thousands of dollars to put a car on the lot at invoice price, the dealer puts out perhaps a couple of hundred dollars per car, borrowing the invoice amount and then some. If the vehicle is sold quickly enough, the holdback should cover the interest charges. This system allows the dealership to control a lot of inventory with very little money, freeing up cash to operate the rest of the business and increasing the return on sales.

The dealers must be expecting a bankruptcy. They are withdrawing their cash because they are afraid of losing it. For Cerberus, this ends up being the equivalent of a run on the bank, because that money would be relent to others within the system if it was kept in the account. Taking one dollar out of the account probably removes several dollars out of the financing system.

Chrysler is obviously in deep trouble. Cerberus can’t or won’t put money into it. At this rate, it’s going to get sold very soon, and at a loss.

The only way this would make sense is if Chrysler Financial was charging less than 2% interest on the loans.

Like any other financial institution, if Chrysler wants to offer loans, then they need to attract capital. That means they are going to have to offer better terms to bond holders and depositors.

I sounds to me like Chrysler was subsidizing the loans to dealers in order to sell inventory. They may have been doing this to the point of actually losing money on each loan.

Could Chrysler no long afford to subsidize the loans and raised the price to reflect that? If Chrysler raised the rates they were charging for loans, then it would made more sense for a dealer to take their cash and pay down debt. Perhaps that is what happened.

Maybe instead of banksters, frauds, con artists, lawyers/liars, PhD’s, “Masters of Business” degreeds, etc etc etc we should actually employ the services of a few 7 year olds to run the world.

Kid A: “I want to buy a toy (car) to sell it for a profit in another school yard. And I know you have some to sell, right?”

Kid B: “Right, yeah. OK, where’s your money?”

Kid A: “I haven’t got any.”

Kid B: “OK. No dice. If you tell me which other school yard, I’ll give you a small cut, though, when I go over there and sell the toy (car).”

Kid A: “Um, how small?!”

See? No ponzi schemes, no flim flams.

Seven year old kids should run the world.