Chrysler to close on Friday

[jayers4647]

Chrysler says it will halt production in the U.S. for at least a month. All 30 of its plants will close on Friday.

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[grizam303]

Re: Chrysler to close on Friday

Link to the article in question:

http://money.cnn.com/2008/12/17/auto...ion=2008121718

[WDCRob]

Re: Chrysler to close on Friday

I'd think that adding the extra two weeks (they typically close for a couple weeks anyway) are at least as much about trying to strongarm Congress and the White House as they are about economics. Especially when you consider all their very public talk about how there are buyers, but no one can get credit.

Not saying it's not true too, just that the Big Three have $14 billion good reasons to make it look, sound and be as bad as possible in the short run.

[GRG55]

Re: Chrysler to close on Friday

I'd think that adding the extra two weeks (they typically close for a couple weeks anyway) are at least as much about trying to strongarm Congress and the White House as they are about economics. Especially when you consider all their very public talk about how there are buyers, but no one can get credit.

Not saying it's not true too, just that the Big Three have $14 billion good reasons to make it look, sound and be as bad as possible in the short run.

Everyone in a negotiation naturally wants to enhance their own position, so what you say makes sense.

On the other hand, I don't think the car industry needs to do anything to fake distress, with auto sales at 1983 levels, as EJ included as a data point in a recent posting. Any business that sees its market unwind 25 years of growth, in a matter of months, is in deep doo doo; negotiating posturing notwithstanding.

Mega: Could be your last chance to get a new Jeep. Of course this news from Chrysler won't matter if you still have your heart set on an F-150...

[jacobdcoates]

Re: Chrysler to close on Friday

I don't think they are posturing. I will admit that they have good reasons to posture. but you don 't do this:

http://www.bloomberg.com/apps/news?p...transportation

Chrysler is pretty much announcing that if you are a Chrysler dealership you are toast. Floorplan financing is how the dealers stock their lots with cars and is a major business relationship, usually to the tone of a couple of million dollars for a average dealership to tens of millions for a large dealership. Most floorplan financing is done through the manufacturer, although regional banks have a large slice of the pie. Usually floorplan financing is cutoff just before and precipitates a dealers bankruptcy and closing. It's akin to burning you crops to get rid of some pests, you only do it when you have no other choice.

The Big Three need to get rid of dealerships and this is definitely one way to do it. It is also quite brutal way and most of these business owner won't soon forget it.