In his address a few moments ago on the auto industry, President Obama announced that GMAC will handle wholesale and retail financing for Chrysler.
Chrysler Financial would have needed more funds than the administration was willing to shell out to make it a viable entity, Obama said.
I think it’s important to have a single company managing Chrysler floorplans, but do we have to assign a single company to handle retail loans? It seems to me that opportunity should be made available to any financiers who step up to the plate.
I agree that we are not at the bottom and I also agree that we will not pull out until we hit bottom. The real question is will there be a real recovery at that point. The article mentions the problems were caused by bad risk management. I think the majority of the institutions had good “Risk Managers” but due to desire for growth. desire for greater market share and competition good risk management was given a back seat. When it is over will we forgwt where we were?
Background Comments on Chrysler Financial from a Senior Administration Official:
Lastly, a critical element as we identified 30 days ago among the hurdles that we needed to accomplish for Chrysler to be viable is a viable finance source for the company. We made the determination that Chrysler Financial did not have the resources and it was not really within our means to provide the resources to Chrysler Financial to support Chrysler Car Company.
And so we are also very pleased today to announce an agreement between new Chrysler and GMAC, which you all know provides not only financing to General Motors but many other kinds of financing. And GMAC will become the financing source for new Chrysler cars going forward from this time. And the U.S. government will provide the financial support necessary for GMAC to expand its activities to include new Chrysler.
All financing for dealers with Chrysler Financial has been halted leaving dealers short of cash with little hope for survival. Dealer trades must be accomplished with checks (cashier’s checks preferred) not through floorplan swaps. Standard rated contracts may be accepted by CF but all other programs seem to be off.
Joe — Has there been any word to dealers of GMAC at all?
It seems like these things are never thought through. The impact on Chrysler dealers is devastating. Chrysler may survive, but will any dealers?
House Bill 2743 needs everyone’s support….however even if it passes and returns the franchises to the terminated Chrysler dealers we will have no inventory to sell until the 2010’s are built and shipped. I am afraid all we can hope for is some type of compensation for our losses.