Is Chrysler done?

[ChrisV]

How are the manufacturers closing dealers?

They're independent businesses, right? So how does it benefit the manufacturer to revoke licenses? Is it way to keep sales high at other franchises that provide better service and higher sales? In other words, appeasing other existing dealers?

Or does it somehow cost the manufacturer a lot of money to have these contracts?

Don't dealer protection laws in many states come into play?

[GoCougs]

Having a bit of experience, I'm sure the franchise agreements have stipulations for Chrysler to share in advertising, training, financing, maybe even absorbing or depreciating slow moving inventory.

[ChrisV]

Still, how can Chrysler or GM "close" an independant business they don't own? Especially if it's a multi-line dealership. And if they are simply saying "we won't deliver cars to those dealerships" in favor of other dealerships, don't anti-trust laws start to be in effect?

[ifcar]

The explanation I heard is that it's inefficient to deliver to lots of little dealers and that when they're overlap the dealers compete against each other too much on price, devaluing the brands.

[GoCougs]

Still, how can Chrysler or GM "close" an independant business they don't own? Especially if it's a multi-line dealership. And if they are simply saying "we won't deliver cars to those dealerships" in favor of other dealerships, don't anti-trust laws start to be in effect?

I don't know really any specifics save for dealers getting "closed" are not having their contracts renewed; meaning, when the current contract expires they'll no longer be a Chrysler dealer ("closed" from Chrysler's POV) but in theory they are still a business.

[ifcar]

Chrysler is canceling its franchise agreements early, which it apparently can do under its bankruptcy protection.

[Nethead]

More bankruptcy shenanigans by Chrysler to relieve the "surviving" Chrysler--if that ever happens--of all recall warranty liability on all pre-bankruptcy Chrysler vehicles!  From www.autoblog.com:

Consumer group objects to Chrysler bankruptcy, says customers could be stranded without warranty
by Dan Roth on May 21st, 2009 at 6:29PM

Joseph Heller's novel Catch-22 is an assault on bureaucratic circular logic, and when talk turns to Chrysler's bankruptcy, you can almost picture the book's character, Yossarian, shaking his head about the latest developments surrounding warranty claims. Current Chrysler owners might find themselves owning vehicular orphans whether or not the company manages to stick around in some form. Chrysler's bankruptcy deal, where there's an upside and a downside to the Schwartz, could see the new, "Good" Chrysler floating above any responsibility for any Chrysler vehicle sold before the bankruptcy.

Consumers groups, realizing that buyers will have no recourse, have filed an objection that's spurred a quickly organized hearing of the House Judiciary Committee. According to a report by ABC, the new Chrysler has agreed to cover normal warranty claims, but when some new issue that would normally prompt a recall campaign pops up ? or some other kind of defect rears its ugly head ? the company would want nothing to do with it. Bad thingamajigy covered, horrible manufacturing or design defect that causes you injury, not covered.  No right to sue, either.

It's not like Chrysler vehicles have stellar resale values now, but if this is how things shake out, the machinations to avoid standing behind its product are likely to further devalue anything wearing a Pentastar.

[Laconian]

So the lifetime warranty is as long as the lifetime of the "evil" Chrysler?

[the Teuton]

I am starting to finally get lost in the semantics debate that is the auto bailout.  Will the old cars have warranties or not?

[Nethead]

I am starting to finally get lost in the semantics debate that is the auto bailout.  Will the old cars have warranties or not?

the Teuton:  As I read it, "regular" warranty issues ("regular" apparently means a warranty issue that is unique to your vehicle but not to identical vehicles owned by others) on pre-bankruptcy vehicles will still be honored by the "new" Chrysler, but no recall issues will be honored nor any kind of parts failure that results in injuries to occupants or to "victims" (a "victim" would be a non-passenger struck by a Chrysler product whose brakes failed, for example).  Those occupants and victims will have to sue the "old" Chrysler in the hopes that the sale of some of the "old" Chrysler's assets will have provided some funds from which they might be awarded some partial compensation by the courts.

[dazzleman]

Have no fear about the warranties.  Obama said the federal government will back the up.  (If that doesn't scare you, I don't know what will.)

[the Teuton]

Iacocca losing pension, car in Chrysler bankruptcy
By Emily Chasan Emily Chasan Fri May 29, 8:27 am ET

NEW YORK (Reuters) ? Lee Iacocca, the car executive credited with saving Chrysler from bankruptcy in the 1980s, is to lose a big chunk of his pension and a guaranteed life-long company car due to the U.S. automaker's bankruptcy filing two decades later.

Chrysler CEO Robert Nardelli told a U.S. bankruptcy court on Thursday that Iacocca's pension would be among the obligations Chrysler will no longer have to pay if it gets bankruptcy court approval to sell itself to a "New Chrysler" to be owned by its union, the U.S. and Canadian governments and Fiat SpA (FIA.MI).

Iacocca, the storied former chairman and CEO who revived Chrysler in the 1980s and appeared in car commercials, has participated in a supplemental executive retirement plan that was comprised of non-IRS qualified pension funds and is subject to bankruptcy.

The claim is unsecured, and typically would be paid after secured creditors in a bankruptcy, but even secured creditors are not expected to get full recovery in a Chrysler bankruptcy that will see hundreds of dealerships shuttered and plants closed.

Chrysler has also written to former executives saying that as a result of its April 30 bankruptcy filing it will stop a program that furnished company cars to former executives and directors.

Iacocca, famous for the phrase "If you can find a better car, buy it," and other senior executives who were part of the program are being asked to return their cars to a Chrysler marshalling center or arrange to pay for them, according to the document.

Chrysler said it regretted the action "in light of the many contributions these individuals have made to Chrysler over the years" and that the "New Chrysler" does not expect to reinstate the car program.

http://news.yahoo.com/s/nm/20090529/bs_nm/us_chrysler_iacocca/print

[Nethead]

This is tragic , but the irony of it all makes me laugh anyway!

[Nethead]

From www.leftlanenews.com:

President Obama?s auto task force says no more funding for Chrysler, GM
06/12/2009, 10:10 AM By Drew Johnson

The Obama administration has poured nearly $80 billion into the domestic automakers, their financial institutions and suppliers, but the President?s auto task force says both General Motors and Chrysler are cut off from additional federal funds.

The President?s auto task force went before the Senate Banking, Housing and Urban Affairs Committee earlier this week, facing law makers for the first time. ?We strongly believe this is the last money that GM will require. I cannot make a promise about the future but I can assure you that it has been a vigorously debated and thought about question,? Ron Bloom, a senior adviser to the task force, told the committee.

Bloom also said there is a ?reasonable probability? that the U.S. taxpayers will recoup their investments in GM and Chrysler, according to the Associated Press. However, when latter pressed about repayment, Bloom added ?by no means would I say I am highly confident that that would occur.?

Chrysler successfully emerged from Chapter 11 protection earlier this month after filing for bankruptcy on April 30th. GM is currently under Chapter 11 protection, but could emerge as early as August 1st.

The question is:  Is this the stake through the heart?

[ChrisV]

The question is:  Is this the stake through the heart?

No, the stake through the heart was the purchase of and cash grab looting of the Chrysler coffers by Daimler, then discarding the husk to an invenstment group. This is just the death spasms that resulted from that staking.

[Nethead]

From www.leftlanenews.com, some very, very good news:

Chrysler Financial makes good on $1.5b loan
07/15/2009, 4:01 PM By Drew Johnson

Perhaps an early indicator that the United States and Canadian governments will be repaid in full, Chrysler Financial ? the former lending arm of Chrysler ? announced on Tuesday that it has repaid the U.S. Department of Treasury on a $1.5 billion loan received in January.

According to Reuters, Chrysler Financial has repaid the U.S. Treasury on a $1.5 billion loan, presumably well ahead of schedule. Chrysler Financial received the loan in January as part of the government?s Troubled Asset Relief Program.

Chrysler Financial used the government loan to help secure dealer and retail financing, but has since been displaced by GMAC as Chrysler?s preferred lending arm. Chrysler Financial continues to offer dealer insurance and alternative financing for retail buyers.

Chrysler Financial is fully owned by Cerberus Capital Management, the former owners of Chrysler.

Although the news is encouraging, it remains to be seen if loans doled out to Chrysler, General Motors and GMAC will also be paid back.

[AutobahnSHO]

Tuesday we drove past the old Augusta (GA) Dodge and a cherry picker was in the parking lot.

A few hours later ALL Dodge signs were gone, but they left the other ones up.

[Nethead]

More good news from www.autoblog.com:

REPORT: Government ends warranty programs for GM, Chrysler
by Chris Shunk on Jul 22nd, 2009 at 5:58 PM

On March 30, President Obama announced that the federal government would back the warranties of General Motors and Chrysler in the event of bankruptcy. When the president says the word "backing," he means cold, hard cash, and in this case the total was $641 million. But with both companies out of bankruptcy court and flush with the government cash needed to run their businesses, it is apparently time to pay the money back.

Automotive News is reporting that new Auto Task Force head Ron Bloom informed a House Judiciary subcommittee that the government would no longer be backing the warranties of GM and Chrysler, adding "consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis."

GM and Chrysler have reportedly returned the $641 million, with interest. GM told Automotive News that it didn't use any of the funds, while Chrysler declined to comment on warranty matters as a matter of company policy.