By on May 4, 2009

After crying that bankrupt automakers can’t sell cars (as in, “there but for the grace of the taxpayers go we”), Chrysler is requesting $753 million to do what it said was impossible. And who minds profit-draining record incentives when taxpayers are picking up the tab? Automotive News [sub] breaks down Chrysler’s request for $4.6 billion of DIP financing, and reveals that incentives are no longer just about moving metal.

According to bankruptcy filings, Chrysler will “only pay incentives to those dealers that they believe have value to the acquiring company.” You know, the “indirect wholly-owned subsidiary of Fiat S.p.A.” In other words, 25 percent of all good, honest, all-American Chrysler/Dodge/Jeep dealerships and the communities they support can go suck it. By AN‘s math, that makes 800 dealerships that have a new biggest problem: how to sell a Sebring without incentives. Sorry guys, but the New, New Carissa, er, Chrysler has sailed without you. You were “Bad Chrysler.” Goodbye.

Meanwhile, if you are considering an automobile purchase and just don’t trust the firms that aren’t failing, Chrysler is making it easy on you. The Pentastar will blow $477 million on incentives for the first four weeks of its bankruptcy, peaking at $147 million for the week of May 25 alone. That’s the week to buy a Chrysler, you crazy person.

For the taxpayers out there (feel the pride!) we have a little more info on how (besides putting cash on hoods) your money will be spent during Chrysler’s bankruptcy. $1.49 billion will go to suppliers for about 45 days worth of already delivered parts. For many suppliers this will be the kiss goodbye since production is at a standstill. $69 million will be spent on marketing. That’s about half of Chrysler’s usual expenditure over the same period, and promises to produce some entertaining copy. $266 million will be spent on warranty claims. Most of these numbers were “arrived at in consultation with the Treasury,” according to ChryCo spokesfolks.

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10 Comments on “Chrysler Requests $753 Million For Incentives-Based Dealer Culling...”

  • avatar

    Uh, wow. So basically cutting dealerships like GM is doing, but trying to find a way to make it sound sweeter. Wonder what makes a dealer “valuable the the acquiring company”, or Fiat/Government Motors?

  • avatar
    Mr. Sparky

    Every Chrysler dealer in the Midwest has to be praying for a tornado right about now.

    The mere thought of selling Sebrings without incentives makes one wish for death (or a least a very large insurance claim).

  • avatar

    Mr. Sparky :
    Every Chrysler dealer in the Midwest has to be praying for a tornado right about now.

    Cerberus was praying for a tornado too.

  • avatar

    Where is that yacht located? Better potential than Chrysler.

  • avatar

    The North Oregon coast. Ah, the New Carissa. I watched as they tried to unfounder/raise it then tow it out to sea to be sunk. When that didn’t work they detonated all the fuel oil, if memory serves. Then they cut it apart for scrap metal. A truer analogy could not be found.

  • avatar

    “Chrysler receives court approval for payments to dealers, suppliers”

    This headline is from automotive news. Can any bankruptcy expert or attorney who is capable of reading this stuff tell me where to read the motion for this…….furthermore does this include the approx 25% of the dealers who “fiat” does not want. do all only the “unwanted” Chrysler dealers that will be stuck holding the bag and the fortunate ones get paid? you there toxicroach?

  • avatar

    The Obama administration is totally losing perspective regarding Chrysler. If we put that same $743 million into improving the environment, we could give each of the million most polluting cars $743 to fix them up. All of that money would go to small local shops and would circulate through the economy. It would also eliminate more pollution than the last two rounds of costly emissions devices. (Okay, I’m guessing here, but you get the drift.)

  • avatar

    Chrysler dealers on edge:

  • avatar

    I use to have a poster just like this picture of the foundering ship in my office. Underneath the picture was a caption that read,”Could this mean that the only purpose of your life is to serve as a warning to others?”

    More appropriate now, in Chrysler’s case, than I ever realized…..

  • avatar

    Do I have this right: the government is putting money into Chrysler to save a private business, and the government is also putting money into Chrysler so it can do away with many private businesses?

    I wonder if it has occurred to GM that it can cull its dealership ranks by raising car prices $5,000 and simultaneously putting $5,000 rebates on the hoods of cars sold by favored stores.

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