Chrysler files for Bankruptcy Chapter 11

[bheiting]

Why would a dealer have only 30 days to sell his inventory?



The closing list announced by Chrysler simply means that franchise agreements for dealers on the list will not be renewed when they expire near the end of 2010. They can't be forced to close, Chrysler has no authority to do that. I would guess that all current Chrysler dealers can continue to operate normally even ordering new Chrysler products for the next few months. I think the "closing in 30 days" is just a marketing gimmick that dealer is using.



$15,000 discounts have been available for at least a year for informed buyers.

Harvey,

You may be right, that's just what CBS News said. Sounded like it was

being dictated from the bankruptcy agreement. I believe they said

it was a condition to getting the new company off the ground. They

also interviewed other dealers that may be bankrupted themselves

from having to sell all their inventory in a short time. Dealer groups

in our area are starting law suits against not only Chrysler, but GM

as well. Interesting times we live in!!!

 

[Bob4x4]

With out a franchise they can not sell new vehicles... ... ... ... ... ... . they can not buy parts directly from the corporation. That pretty much sums it up.

 

[bheiting]

From the blogs I just read, Chrysler wants all support for the doomed dealers
to end on June 9. That would included all reimbursements for warranty work as
well as sales incentives. As Bob points out, that pretty well puts them out of
business as a new vehicle dealer. Some dealers are vowing to stay on as used
car lots. I wish them well. At Chrysler's urging, many dealers have spent millions
opening up new show rooms and service facilities. Then they told them to keep
buying inventory to keep the factories open. Now this. You wonder if the retained
dealers aren't questioning weather they want to do business with Chrysler in the
future.

 

[Bob4x4]

Auburn Hills Chrysler Company Dodge Electric Vehicles Employee Industry International Jeep Mopar Motorsports

Papers filed to retain majority of U. S. dealers

Posted Friday, May 15, 2009, 11:26 am in Restructuring



Last modified on Monday, May 18, 2009, 9:07 am.



Chrysler LLC yesterday filed a motion with the U. S. Bankruptcy Court seeking to reject certain U. S. dealer agreements, and submitted a list of U. S. dealer agreements to be assigned to the buyer of its business assets.



Subject to court approval, 2,392 Chrysler, Jeep® or Dodge dealers will continue with the new company in a global alliance with Fiat once the sale is complete. This action will help improve the landscape of the Chrysler dealership network following the sale and enhance the full line portfolio of Dodge, Jeep and Chrysler products for customers.



“We are in the process of revitalizing Chrysler’s business to succeed as a viable enterprise under new ownership in the future,” Jim Press, Vice Chairman and President, said. “The unprecedented decline in the industry has had a significant impact on our sales and forced us to reduce production levels to better match the needs of the market. With the downsizing of operations after the sale and reduction of plants and production, similar reductions must be made to the size of the dealer body. We appreciate the support of our dealers and regret this painful action. We wish market conditions made it possible to keep everyone. ”



Chrysler plans to maintain “business as usual” with all of its dealers through the transition. The company intends to honor warranty and incentive payments during the period that rejected dealers remain active. Chrysler is committed to working with these dealers to ensure a positive relationship with customers. To ease the burden on dealers whose agreements have not been assumed, Chrysler will work to assist in the redistribution of new vehicles and parts to the remaining dealer network.



“It is with a deep sense of sadness that we must take steps to end some of our Sales and Service Dealer Agreements,” Steven Landry, Executive Vice President—North American Sales, Marketing and Global Service and Parts, said. “The decision, though difficult, was based on a data-driven matrix that assessed a number of key metrics. In total, 789 dealers, which represents 14 percent of our sales volume, will be rejected and, subject to the court approval, they will discontinue selling Dodge, Chrysler or Jeep vehicles on or about June 9.



“The review was an objective and rigorous process that was both thoughtful and thorough. We plan to work to have an orderly transition. These are extraordinary times, and they call for an extraordinary response. It is important to our dealers and to our customers that these steps be completed quickly and seamlessly as we transition to a new Chrysler,” Landry added.



Additionally, on May 12, the court approved the motion regarding Chrysler LLC’s agreement with GMAC Financial Services to provide the automotive financing products and services to the company’s dealers and customers moving forward. GMAC Financial Services will be the preferred lender in North America for Chrysler, Jeep and Dodge dealer and consumer business, including wholesale of new and used vehicles as well as retail. GMAC Financial Services will be able to offer the best long-term finance options for Chrysler dealerships and customers and is established as a bank holding company with access to a variety of funding sources.



While difficult, the actions to restructure its dealer network are a necessary part of Chrysler’s viability plan and are central to the proposed sale transaction. These actions will help ensure that both remaining dealers and the new company will be stronger and more profitable going forward.



“A stronger dealer network supported by GMAC’s long-term finance options provides an advantage to consumers, and that is what will ultimately drive the creation of a significantly stronger global competitor,” Press said.



Additional information, including the motions filed, can be found at Client Home.

 

[HBarlow]

The use of dates without years in the press release above leads to confusion. The statement in the press release:

"Chrysler plans to maintain “business as usual” with all of its dealers through the transition. The company intends to honor warranty and incentive payments during the period that rejected dealers remain active. Chrysler is committed to working with these dealers to ensure a positive relationship with customers. To ease the burden on dealers whose agreements have not been assumed, Chrysler will work to assist in the redistribution of new vehicles and parts to the remaining dealer network. "

makes me think Chrysler intends to continue support of the rejected dealers through May and June of 2010 but it is unclear. At least two of the press releases using the date May 12th as above were actually filed after May 12 so it sounds like they're talking 2010.

By the end of the nobama administration I think we're all going to have our Dodge-Cummins trucks and heavy recreational trailers parked in our barns or backyards where we can get together, admire them, and talk about the good old days when Americans were free and able to travel and enjoy the liberty set forth in our Constitution. We won't be able to cook hamburgers or hotdogs on the grill during our good old days parties, that too will be forbidden by the new socialist regime, pollution, you know.

 

[Jim W]

I normally avoid political discussions but I find this one very interesting and note worthy. In the locally paper yesterday Congressman Bill Forster, D 68 district along with 68 other colleagues, are asking the U. S. Treasury's Auto Task Force to reconsider the dealer closings. One reason other then tax revenue loss is more then 150,000 additional people will be out of work. They also sited loss of revenue and market share by not being able to sell through these closed dealers for Chrysler and GM in the future. Very Very interesting.



"In my many years I have come to a conclusion that one useless man is a shame, two is a law firm and three or more is a congress. " -- John Adams

 

[Grizzly]

By the end of the nobama administration I think we're all going to have our Dodge-Cummins trucks and heavy recreational trailers parked in our barns or backyards where we can get together, admire them, and talk about the good old days when Americans were free and able to travel and enjoy the liberty set forth in our Constitution. We won't be able to cook hamburgers or hotdogs on the grill during our good old days parties, that too will be forbidden by the new socialist regime, pollution, you know.

Harvey, with all due respect, you have painted a very gloomy picture of our future. Admittedly, we are going through some hard times and it is necessary for some belt tightening, but I don't believe that we will be parking our trucks and RV's or unable to cook hotdogs.



Have faith in our Country and think positive. This too will pass. george

 

[Gary - K7GLD]

By the end of the nobama administration I think we're all going to have our Dodge-Cummins trucks and heavy recreational trailers parked in our barns or backyards where we can get together, admire them, and talk about the good old days when Americans were free and able to travel and enjoy the liberty set forth in our Constitution. We won't be able to cook hamburgers or hotdogs on the grill during our good old days parties, that too will be forbidden by the new socialist regime, pollution, you know.

I fully agree - 1000%!



Sadly far too many here on TDR, and the nation and world are chanting a Pollyanna "It's only temporary, the sky will get bluer again - and all our troubles will (somehow, magically, perhaps?) fade away... "



Exactly HOW is that "miracle" supposed to happen? At the very SAME hands of the local, state and national politicians who over the decades, GOT us here in the first place? Exactly WHAT is going to CHANGE to "make things better"?



Wishes? prayer? blind faith in events and processes we don't even TRY to understand and/or change?



Personally, I put far more "faith" in the tooth Fairy...

 

[LBARTLETT]

Grizzly, I must agree with Harvey, with revenues dropping the gas tax will rise getting us back to $4. 00 where we can't afford to drive that we like to, then there's cap and trade which is nothing than another tax on all of us who consume energy of any type, that will be another way for them to penalize those of us that like size and power in the vehicles we drive, very many miles and we'll be exceeding our allowed carbon emission standard which will cost us more

 

[HBarlow]

Harvey, with all due respect, you have painted a very gloomy picture of our future. Admittedly, we are going through some hard times and it is necessary for some belt tightening, but I don't believe that we will be parking our trucks and RV's or unable to cook hotdogs.

Have faith in our Country and think positive. This too will pass. george

Grizzly,

I consider you a friend and don't wish to offend you but I strongly feel doom and gloom and have zero confidence in the new socialist administration to fix or improve anything. Actually, I have total confidence that everything nobama and the socialist led congress are doing is guaranteed to wreck the America that we know and love and the America that has allowed so many of us to enjoy a wonderful standard of living and lifestyle. I don't see how any intelligent person could truly believe that the policies the socialists are implementing can bring anything but destruction to the private enterprise system.

It is individual and business freedom that has allowed the productive among us to create the products, services, and jobs that has made this nation great. Government has never and will never create anything of value, they can only take from some and redistribute to others and restrict and hamper private industry.

The nobama administration has already doubled or tripled the national debt created in more than 230 years of our existence and is continuing to spend like crazy and build more debt each day. At the same time they have wrecked the private lending industry, banking, the automobile industry, and are currently working on destroying the credit card industry. Next on the agenda for destruction is the world's finest health care industry. The oil industry is in their sights and so is the firearms industry. By the end of the year they will increase income taxes, corporate income taxes, fuel taxes, etc. , etc.

Yes, my friends, I feel severe doom and gloom. Anyone who is optimistic about the future of America under socialism is a more optimistic (or considerably more naive) person than I.

 

[Grizzly]

Harvey, We have had many good discussions on other matters and I too consider you a friend, but we do have a difference of opinion on this point.



I gather that you don't like President Obama. Would you rather bush was still our president? Remember it was bush jr that got into this mess in the first place and he didn't have the brain capacity to fix the problem before they got worse. At least Obama is doing something to try to fix bush's problems. And he will.



Just for the record I am a Democrat, but I didn't vote for Obama, I voted for McCain. Now that Obama has been in office for more than 100 days, I feel that the right choice was made.



I may be the naive person you speak about, but I am also a person of positive thinking. This country will emerge from our many crisis. It's not going to happen overnight, after all it took bush 8 years to get us in the bad state we're in. Tighten your belt and give it time. This is still the greatest country in the world.

 

[LBARTLETT]

The blame must be placed where it belongs, at the feet of Congress, it began with the Community Reinvestment Act that tripled the size of Freddie Mac and Fannie Mae, 3 times the Bush Admin. tried to increase the oversight and regulation of those entities but Congress wouldn't approve and Dodd and Frank said there wasn't a problem, the 2nd disaster was the derivatives known as bad debt swaps, they were backing the mortgage backed securities and have been written between countries, that is shy this issue is now global, you don't hear them called bad debt swaps, they're called exotic derivatives, I was in banking and involved directly when these crazy things happened, forced by regulation to make residential mortgage loans no one in their right mind would have made, sold to Freddie or Fannie and somebody bet (bad debt swaps) they wouldn't fail, when they did the guarantor had no assets to bad up the guarantee he had given and thus we are in a wreck and the taxpayers will pay, in my opinion the bad/hard times haven't even started yet

 

[bheiting]

The blame must be placed where it belongs, at the feet of Congress, it began with the Community Reinvestment Act that tripled the size of Freddie Mac and Fannie Mae, 3 times the Bush Admin. tried to increase the oversight and regulation of those entities but Congress wouldn't approve and Dodd and Frank said there wasn't a problem, the 2nd disaster was the derivatives known as bad debt swaps, they were backing the mortgage backed securities and have been written between countries, that is shy this issue is now global, you don't hear them called bad debt swaps, they're called exotic derivatives, I was in banking and involved directly when these crazy things happened, forced by regulation to make residential mortgage loans no one in their right mind would have made, sold to Freddie or Fannie and somebody bet (bad debt swaps) they wouldn't fail, when they did the guarantor had no assets to bad up the guarantee he had given and thus we are in a wreck and the taxpayers will pay, in my opinion the bad/hard times haven't even started yet

Could you identify the regulation that forced banks "to make residential

mortgage loans no one in their right mind would have made". Yes

banks were requested by the Clinton administration to make loans

to lower income households, but no one forced banks to make the

stupid mortgages to those who couldn't repay them. There are

plenty of greedy bankers who could care less if the loans were

high risk if they could rate them AAA and sell them to some sucker

in the secondary market. It was the lack of regulation on the part

of Congress that allowed the American public to be held hostage

by this fisco. You can thank the banking lobby for the millions

they poured into Congressional campaigns for this lack of oversight.

McCain friend and campaign manager, Phil Graham, did more than

any one to make sure no one in Congress stepped on the toes of

the New York financial establishment. For his efforts old Phil

was made vice chairman of UBS. There's plenty of blame to go

around in Congress, but they aren't the only culprits.

 

[HBarlow]

I've already posted too much of a political nature on a non-political forum so won't go into anymore detail here but to say that I am not a fan of nobama would me the most gentle, polite understatement ever made.

Following the current political leadership and being optimistic that things are going to get better is much like walking into a burning building while hoping the roof won't collapse on me or that I won't be burned.

Remember the former USSR? We are implementing all their policies.

 

[bheiting]

Harvey, you don't sound like you fit in with the conservative movement, reportedly
the happiest people in the country.

The former USSR went bankrupt on military and security spending. We have a new
administration now.

 

[HBarlow]

Conservatives, by nature, are a generally happier group but are not happy at seeing their country destroyed by a socialist. You're mistaken on the other point and showing your own liberal/democrat bias but again, this is not a political forum so I won't go any further.

 

[RVTRKN]

Republicans and Democrats have blame in this and not just the Bush administration. Bush takes the blame because he started this bailout madness. Carter takes the blame for starting the the mortgages nigtmare, Clinton enhanced it. BUT CONGRESS IS THE ONE TO BLAME, THEY ARE THE ONES WHO TOOK AND GAVE MONEY TO FANNIE MAE AND FREDI MAC. The sweet heart deals that have come to lite will not be prosecuted because the CONGRESS won't act to punish those who did. But the home loans that started this chain reaction are from the Community Reinvestment Act which is a product from Carter. This is what happens when you reward something to someone who didn't earn it. The politics of this are to complicated to explain on TDR in one thread, but the conservatives (not republicans) have been warning everyone for the last couple of years. There is plenty of blame to go around. The UAW has been chocking the Auto industry, and is the cause of failure of the auto industry. Oil prices are the product of the environmentalists chocking the energy we can produce to help in fuel costs and the CONGRESS enacting laws to force the auto industry into building autos we don't want waisting there revenues to stay afloat from the chocking UAW ect,ect,ect,ect,ect,ect,ect,ect. Government needs to keep there hands out of our pockets and industry.

 

[Gary - K7GLD]

AS Harvey pointed out, this is not a political forum or thread - and I will only make this final comment along those lines, and then end further political involvement in this thread.



Those insisting upon the Republican vs Democrat, Bush vs Obama blame game, are simply foolishly continuing to play the game of diversion favored by those rich and powerful behind the scenes - they are obviously as successful at pulling OUR strings, and diverting our efforts and attention, as they are in setting up and controlling those we call our "leaders"



As long as we continue to allow ourselves to foolishly be distracted by the trivialities, we never get ANYWHERE as to correcting the actual root problems. Clinton followed the same directions given him, just as Bush Sr. did before him - and Bush Jr. , and now Obama - like those before them, ALL COME FROM THE SAME political "pot" - all have the SAME endgame final goal!



The only minor difference between a Republican and Democrat President lies in relatively minor variations dictated by their party affiliations, and the resulting speed their agendas can be established - but their basic ultimate goals and plans for our nation are essentially exactly the SAME!



Bush or Obama are NOT the basic issue - they are only frontmen/agents for those who ARE calling the shots and dictating policies and agendas - the sooner we STOP being blinded by the distractions of the frontmen - and start focusing on THEIR masters, the sooner we can better deal with the root problems...

For a clue - WATCH the video pointed to in my sig below!​

 

[RVTRKN]

AS Harvey pointed out, this is not a political forum or thread - and I will only make this final comment along those lines, and then end further political involvement in this thread.



Those insisting upon the Republican vs Democrat, Bush vs Obama blame game, are simply foolishly continuing to play the game of diversion favored by those rich and powerful behind the scenes - they are obviously as successful at pulling OUR strings, and diverting our efforts and attention, as they are in setting up and controlling those we call our "leaders"



As long as we continue to allow ourselves to foolishly be distracted by the trivialities, we never get ANYWHERE as to correcting the actual root problems. Clinton followed the same directions given him, just as Bush Sr. did before him - and Bush Jr. , and now Obama - like those before them, ALL COME FROM THE SAME political "pot" - all have the SAME endgame final goal!



The only minor difference between a Republican and Democrat President lies in relatively minor variations dictated by their party affiliations, and the resulting speed their agendas can be established - but their basic ultimate goals and plans for our nation are essentially exactly the SAME!



Bush or Obama are NOT the basic issue - they are only frontmen/agents for those who ARE calling the shots and dictating policies and agendas - the sooner we STOP being blinded by the distractions of the frontmen - and start focusing on THEIR masters, the sooner we can better deal with the root problems...

For a clue - WATCH the video pointed to in my sig below!​

Get rid of the idiots in power who think we should give our (peoples) money to the so called poor with their 52" TV's, cell phones and SUV's and this crap will end. The thread itself is of political nature being that leader Mao Obama dictated the Bankruptcy terms. And that video of an hour and a half, forget about that. I know a dictator when I hear/see one.

 

[LBARTLETT]

the Copmmunity Reinvest Act forced banks to make a certain number of loans within their delineated territory that they would not have otherwise made, I ran a bank east of Dodge City but had farm loans west of Dodge City so I was forced by regulators to make home loans in Dodge City or get less than "satisfactory" on my CRA review, didn't matter what my underwriting standards were, if a certain number were not to minorities or single mothers I would be accused of discrimination; it didn't affect our credit quality as Freddie and Fannie were more than willing to book the loans, package them and sell them into the secondary market to investors



CRA started due to large banks "redlining" parts of Detroit, NY, Chicago and other large cities but came to impact even small ag banks across the country "GREEDY BANKERS"