Fiat’s explanation of its deal with Chrysler states, “Pending (the transactions) approval, the current Chrysler will continue its normal business operations and the US Treasury and the Canadian government will provide the company with financing in order to allow the performance of all its obligations towards the employees and to fund its on-going needs.” But according to The Detroit Bureau, this isn’t the case. “During the bankruptcy proceedings, which are expected to last from 30 to 60 days, most of its manufacturing facilities will be closed. It is only when the New Chrysler emerges from bankruptcy that production will gradually resume. Workers will be eligible for supplemental unemployment benefits, worth about 80% of pay. Some additional plant closings are anticipated.” Which means either The Detroit Bureau has its facts wrong, or Fiat does. And if Fiat is wrong and Chrysler will halt operations during bankruptcy, what does Auburn Hills need $3.5 billion in government DIP financing for?
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“And if Fiat is wrong and Chrysler will halt operations during bankruptcy, what does Auburn Hills need $3.5b in government DIP financing for?”
word up, Ed. i’m curious if the Detroit Bureau piece is the only one to contradict what’s in the corporate press releases… search engines, here i come!
Looks like the shutdown already happened:
http://freep.com/article/20090430/BUSINESS01/90430058/Chrysler+s+filing+triggers+shutdown
Does this mean I won’t be able to buy my special edition “Rattlesnake” Viper, with loose bolts dropped in all the hidden crevices.
“…current Chrysler will continue its normal business operations and the US Treasury and the Canadian government will provide the company with financing in order to allow the performance of all its obligations towards the employees and to fund its on-going needs.”
“Normal business operations” = sucking money out of government coffers.
“allow the performace of all the obligations towards the employees and to fund its on-going needs.” – make payroll, keep the heat on so the pipes don’t freeze, and keep the raiders and bandits out of the plants.
Can GM be far behind? (As in tomorrow, May Day (!))
The rumor floating about the steel industry is that US Steel demanded COD for its steel yesterday, which would cause the stamping plants to go down.
Seems like Chryco would need a few billion just to cover legal fees and to give the judge some cash to spread around.
If I understand things, Chryco takes the money for cars once they are financed by the dealer. So my thinking is that every single car on every lot could sell tomorrow and Chryco wouldn’t get a dime.
In fact they would owe money to pay for incentives and such. So without a few billion, I would guess that they the entire supply / sales chain would implode and leave nothing for Fiat to work with.
Another thought.. Say you just bought a Chryco last week, and it needs something fixed…
Should be fun to watch the dealers decide if they are going to do warranty work until the judge makes a ruling on paying for it.
Anything near Chrysler is going to get jacked up ASAP… The GM boys are going to be pissing their shorts over the next week or two watching it all happen.
“And if Fiat is wrong and Chrysler will halt operations during bankruptcy, what does Auburn Hills need $3.5 billion in government DIP financing for?”
Bob Nardelli’s severance package.
The union folks are gonna get 80% pay during the shutdown (recently renegotiated from 95%). The company supplements the state unemployment sum up to the 80% amount. So that will burn some of the DIP.
you know i like what has happened today. all involved are trying to do their best to weather the storm created by others. Yes, mistakes have been made. But there are many domestic automobiles out there with as many miles as any foreign owned companies cars and trucks. Watched a portion of the webcast tonight and my take is that yes management of domestics has led all to seek tomorrows profit instead of next years. I believe when its all over we will all be glad for the angst we’ve all been put through.
29 year veteran of auto sales.
Poor Obama will be dragged down by Detroit.
This is a joke industry. A nation that cannot produce its own transportation is not really a nation at all.
This is a joke industry. A nation that cannot produce its own transportation is not really a nation at all.
Define “cannot produce it’s own transportation”? Neither Canada nor Finland have native auto industries, do they count as nations?
I should have said superpower. Everything is pretty crappy right now.
Here’s what I don’t get: GM and Ford are struggling to survive. The market it is just too small.
So what do the “We must have a transportation industry” guys advocate? Keeping the weak sister around to suck up 10% of the market just long enough to kill the other two. It’s really clear thinking!
Cause AIG got a bailout! Or something!
Unemployment at 80% pay. Nice. Most laid off workers are lucky to get 20 or 25% at best. And guess who pays for that?
I want to understand more about the Obama covered warranty plan? Is his statement in any way legally binding? What is the govt warranty plan? Anybody?