Bailout Watch 228: Chrysler to Congress: $7b by January or We're Dead [Plan Below]

Robert Farago
by Robert Farago
bailout watch 228 chrysler to congress 7b by january or were dead plan below

So here it is: Chrysler’s turnaround plan. And while you’re digesting that, Automotive News [sub] gives us the takeway: ChyCo will have $2.5 in cash by the end of the month. That’s not enough money to pay its suppliers, never mind anything else. “The bridge loan will help cover an estimated $11.6 billion in expenditures it [Chrysler] will have in the first quarter of 2009. The biggest chunk of those expenditures will be an estimated $8 billion tab from component suppliers.” Hang on; $2.5b plus $7b is $9.5b minus $8b is $1.5b. So, by it’s own reckoning, Chrysler will be back for more money by the second quarter of 2009. And why wouldn’t it? Profit! “Chrysler assumes it will have a 10.4 percent share of the U.S. market in 2009 and 10.7 percent in each of the next three years after that. Based on those numbers, Chrysler estimates it will have operating profits of $400 million in 2009, $2.6 billion in 2010, $2.0 billion in 2011 and $1.8 billion in 2012.” That’s IF the suppliers play ball and DON’T demand cash on the nail. But wait! There’s more! “Nardelli cautioned that the federal loan will work only if Chrysler Financial can support Chrysler with wholesale and retail lending. ‘Chrysler Financial is in need of immediate liquidity support,’ the Chrysler statement said.” So how much is THAT boondoggle going to cost us? Not specified, but I wouldn’t bother checking your wallet for twenties. Anyway, why isn’t Cerberus paying for all this? They can afford it. Anyone? Bueller?

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  • Jpcavanaugh Jpcavanaugh on Dec 03, 2008

    Profitable in 2009? Are these people from GM? I think it is time for Chrysler to license a Magnum mens fragrance and a W P Chrysler line of golf attire. Makes as much sense as the product plans I'm reading about.

  • AJ AJ on Dec 03, 2008

    I wonder how many drunken dinners the guys at Cerubus had when they were talking about buying Chrysler? I'm sure buying a car company sounded simple and fun after a few drinks! I'd want Jeep myself! LOL

  • Nonce Nonce on Dec 03, 2008

    Holy fuck. "Chrysler has been the one of most agile and innovative of the three Detroit automakers." What the hell. What the sweet fucking hell. You're asking for seven billion dollars and you cannot even construct a sentence properly?? FAIL. FAIL FAIL FAIL!

  • INeon INeon on Dec 03, 2008

    Nonce-- What the hell in your context should be followed by a question mark. "what the hell." means something completely different than what you're attempting to communicate. FAIL. FAIL. FAIL. Sweet fucking fail.