Something that seems to be underneath EVERYONE'S radar...

So, yeah, Chrysler wants to weed out some dealers in bankruptcy court. Its going to be a lot easier than a lot of people think.

See, when Team Obama came out with their revised plan for Chrysler, which involves GMAC taking over all floorplanning and captive financing from Chrysler Financial and essentially folds CFC into GMAC, they left out one small part of this plan....

Every single dealer in North America right now that has a CFC floorplan has a frozen floorplan :mad:

That's right. What does that mean? For someone like me, that depends on a floorplan to purchase used cars, take cars in on trade, create working capital by flooring trades I have cash in? You get the idea....

Watch for a WIDESPREAD closing of Chrysler dealers in the next 30 days...seriously. GMAC has given us zero word on when we can expect a replacement GMAC line. All dealers can do with their current CFC line is pay down the balance when we sell cars...not add to it. And what bank is going to take on a Chrysler dealer as a new floorplan customer these days???

Many of us may be royally screwed. Amazing how this flew under the radar in the press, eh? I think this is just another weed-out tactic to get rid of weak dealers. The problem for Chrysler is, how many STRONG Chrysler dealers are realistically left???? Not too many!

Put this into terms that us non dealers/sales people can under stand.

No new product? no financing for new product?

So, yeah, Chrysler wants to weed out some dealers in bankruptcy court. Its going to be a lot easier than a lot of people think.

See, when Team Obama came out with their revised plan for Chrysler, which involves GMAC taking over all floorplanning and captive financing from Chrysler Financial and essentially folds CFC into GMAC, they left out one small part of this plan....

Every single dealer in North America right now that has a CFC floorplan has a frozen floorplan :mad:

That's right. What does that mean? For someone like me, that depends on a floorplan to purchase used cars, take cars in on trade, create working capital by flooring trades I have cash in? You get the idea....

Watch for a WIDESPREAD closing of Chrysler dealers in the next 30 days...seriously. GMAC has given us zero word on when we can expect a replacement GMAC line. All dealers can do with their current CFC line is pay down the balance when we sell cars...not add to it. And what bank is going to take on a Chrysler dealer as a new floorplan customer these days???

Many of us may be royally screwed. Amazing how this flew under the radar in the press, eh? I think this is just another weed-out tactic to get rid of weak dealers. The problem for Chrysler is, how many STRONG Chrysler dealers are realistically left???? Not too many!

Not surprising at all that the media didn't cover it.

Unless it creates panic or is detrimental to the big 3, they're not interested in it.

For the media to take up your story would mean that they were actually dedicated to helping the community and standing behind a cause. We all know that counterproductive to making profits.

But this into terms that us non dealers/sales people can under stand.

No new product? no financing for new product?

1) No new inventory for dealers, above and beyond what's already in stock. Can't get new cars from the factory if you have to pay cash up front to get them.
2) No used inventory for dealers for the same reason. We survive on used cars, especially right now. If I can't buy more used cars, what will I have to sell?
3) No way of doing dealer swaps with other dealers. You know how a lot of dealers will go to Timbuktu to find you a car? Not anymore, unless you're willing to sign up for it 100% sight unseen, because that dealer has cash tied up in it now.
4) No easy way of getting additional working capital for dealers. Some of my used cars are on my line of credit...some have cash tied up in them. Its easy to throw a car on the line and get cash to pay bills...impossible if your line is frozen.

Interesting. Then I guess the idea of packaging Saturn with Opel makes more sense now. Fiat keeps Chrysler's NA manufacturing operations, loses the Chrysler dealer network, uses the Saturn dealer network to sell Fiats, Opels and Chryslers in NA. Etc. :p

SO if I'm reading you right and I really hope I'm not. Chrysler/GMAC is basically cutting the funding to all the dealers as almost to see who survives before installing a new financing plan from them?
And then for those that fail your only recourse is going to bankruptcy court against them.

I'm quite curious how they planned to cut dealers. Because they are independent businesses and aren’t exactly subject nor guilty of the same business issues that the manufacturers are.

I remember this was a big issue for GM when they phased out Oldsmobile and one of the main reasons that GM hasn't cut more brands because of how costly and difficult it was to get out of their obligations with Olds dealers.

But I guess that was before money is just paper and numbers on a computer screen and the Gov't fixes everything.

1) No new inventory for dealers, above and beyond what's already in stock. Can't get new cars from the factory if you have to pay cash up front to get them.
2) No used inventory for dealers for the same reason. We survive on used cars, especially right now. If I can't buy more used cars, what will I have to sell?
3) No way of doing dealer swaps with other dealers. You know how a lot of dealers will go to Timbuktu to find you a car? Not anymore, unless you're willing to sign up for it 100% sight unseen, because that dealer has cash tied up in it now.
4) No easy way of getting additional working capital for dealers. Some of my used cars are on my line of credit...some have cash tied up in them. Its easy to throw a car on the line and get cash to pay bills...impossible if your line is frozen.

This doesn't make sense though. Why would they allow this to happen? :think:

No new or used inventory means people won't buy cars. That's the last thing any auto company needs right now.

SO if I'm reading you right and I really hope I'm not. Chrysler/GMAC is basically cutting the funding to all the dealers as almost to see who survives before installing a new financing plan from them?
And then for those that fail your only recourse is going to bankruptcy court against them.



You read it right. Sadly, my career depends on us making it through this.

monstertodd,
What DOES make sense anymore? Shortly, when Chrysler starts production again, your FRESH new-car inventory will be placed on a supplemental line provided to you by GMAC....

If you're still in business 60-90 days from now...

Do any other banks finance floorplans. I know that is a stupid question because if I owned a bank I would not loan money to a Chrysler dealer.

While they will trumpet all the union jobs they saved, no one wants to talk about job losses at the supplier and dealer level.

Pouring a little more salt in the wound.

http://www.gminsidenews.com/forums/f12/chrysler-wont-pay-incentives-due-all-dealers-78874/#post1727208

NEW YORK -- Chrysler LLC is asking for court permission to pay up to $753 million in dealer incentives during its 60-day bankruptcy period.

The company also said in U.S. Bankruptcy Court here it won't make incentive payments to all of its dealers. In filings today, Chrysler said it will "only pay incentives to those dealers that they believe have value to the acquiring company," to be controlled by Italy's Fiat S.p.A. Chrysler hasn't said how it will measure that value.

Chrysler representatives were in court today to lay out a budget for the 60-day bankruptcy period. In its filing, the company also asked that its suppliers be paid $1.49 billion in debtor-in-possession financing for parts already received.

The filings came on the second day of motions before Judge Arthur Gonzalez. Chrysler's strategy under Chapter 11, Section 363, of the bankruptcy code is to separate good assets from bad as quickly as possible to set up a financially healthy new company. That includes shutting down eight factories and closing unprofitable dealers.

In supporting documents, Chrysler said its post-bankruptcy budget assumes that 25 percent of its dealers won't get the incentive payments "as the company looks to reorganize its dealer network." Kathy Graham, a Chrysler spokeswoman, said she could not immediately clarify what that means.

Do any other banks finance floorplans. I know that is a stupid question because if I owned a bank I would not loan money to a Chrysler dealer.

While they will trumpet all the union jobs they saved, no one wants to talk about job losses at the supplier and dealer level.

No, they don't. The unions got their guarantees, and now they get equity in the whole company. Meanwhile, their retirees still get phenomenal health care.

All the while, dealers have their franchise agreements torn up in bankruptcy, get starved out of existence, and the ones that do remain won't even collect 100% of the rebates they've paid to dealers!! That's right! Chrysler wants to only make 75% dealer payments in May, and 50% in June!! So now, I'm guaranteed to lose money on every new sale, as if I was making anything to begin with!

It's getting thicker every day...

Good thread, Jason and thanks for bringing it to attention. Here's something you're interested in just announced by GMAC.

http://www.freep.com/article/20090505/BUSINESS01/90505087/GMAC+to+vet+Chrysler+dealers

Chrysler, Jeep and Dodge dealers who want to survive Chrysler LLC’s bankruptcy must pass a credit assessment that GMAC will conduct over the next six months.

“GMAC will promptly conduct dealer credit assessments over the next 180 days to determine which dealers are eligible for a longer-term credit line,” said Michael Keegan, Chrysler vice president for volume planning and sales operations, in a bankruptcy court filing.


Keegan said those who fail the assessment will be told quickly enough so they can seek loans elsewhere.

On the bright side, when this is over..it will be much better for the dealers that do survive.

No, they don't. The unions got their guarantees, and now they get equity in the whole company. Meanwhile, their retirees still get phenomenal health care.

All the while, dealers have their franchise agreements torn up in bankruptcy, get starved out of existence, and the ones that do remain won't even collect 100% of the rebates they've paid to dealers!! That's right! Chrysler wants to only make 75% dealer payments in May, and 50% in June!! So now, I'm guaranteed to lose money on every new sale, as if I was making anything to begin with!

It's getting thicker every day...

No, they don't. The unions got their guarantees, and now they get equity in the whole company. Meanwhile, their retirees still get phenomenal health care.



Seems to me that the unions got rewarded and EVERYONE else got a screwing royale in the Chrysler deal.

I expect that the government has similar plans for GM.

Jason, I know you've been hard at work for your business. It really is admirable.

I can't say I'm surprised at the current dealer situation, though--Chrysler is going bankrupt. I think the existing dealers are lucky that this is going to be a relatively quick revamping. It's probably better than a lot of other scenarios out there. You could be a Pontiac dealer.

You've got a strong will. I've been watching the sun set on Chrysler for a long time. I think I would have lost my comfort zone right around the time with the mess with Cerebrus and I'd have been out of there. But you stayed in.

For what it's worth, I hope things pick up and that the concessions for dealers only get better in the uncertain days to come.

Seems to me that the unions got rewarded and EVERYONE else got a screwing royale in the Chrysler deal.

I expect that the government has similar plans for GM.

Gettelfinger said it best, how did the UAW get special treatment? The UAW traded billions in equity and lets face it, today that equity stands at $0.

Show me how the UAW got rewarded. They put the VEBA Trust Fun for retirees on the line with no guarantee that their gamble pays off.

The problem Josh with your assessment is that if Chrysler went into bankruptcy under NORMAL circumstances, the UAW wouldn't have gotten much anyway, and wouldn't have had the opportunity to recoup their losses.

They were not a secured creditor. More and more, I agree with where Charlie is coming from. This truly is uncharted territory. Unsecured debtors were put ahead of secured ones. Money owed to THOUSANDS of dealers for selling THEIR product will go unpaid. THOUSANDS of dealer employees will lose their jobs over this.

Meanwhile, the UAW keeps retiree health care. This is a concept I don't grasp for the most part, anyway. WHY is it that GM, Ford and Chrysler need to keep funding so many billions for health care for people that quite often retired years ago, under much different circumstances than these companies face today? IMO (for whatever that's worth), UAW legacy costs have crippled these companies...yet they stay intact? I simply don't get it. No other group of old people get this kind of treatment...why can't they be on MediCare like every other damn old person I know??? Like I will have to be on in 50 years?


Quasar,
Thank you for the acknowledgement. The sad irony here is that the previous dealer I worked for was an Olds/Pontiac store. Must be bad luck follows me through this career field...who knows. The reason I don't run screaming the other way is because at this point, where am I going to go? My wife and I were talking about this just last night. Despite the market implosion, I'm still on pace to make decent money this year if we can get through this. I have a free car, and free gas. I'm 29 years old, and even at my lessened income, could not replace this job easily at all.

Therefore, I might as well ride it out. 75% of Chrysler's dealers will be keeping their franchises, and there is no other Chrysler dealer within 35 minutes of me (the only 2 that were closed last Fall), ensuring that I have a nice geographic area to service. If we get the franchise re-approved, and get GMAC financing, when this market turns around next year I stand to make significantly over 6 figures. On the flip side, I can be a middle-manager drone somewhere like I was in Corporate America, making $60k if I'm lucky. If I leave too soon, given that scenario, I screw myself because replacing this job will be VERY hard. There's a vast number of dealership employees from closed stores scrambling to find the few jobs in this field...most with more experience than me. Let's just see if I get the chance to keep it...

In case anyone cares, if you're wondering if your local dealer will get to keep their franchise, these are the original guidelines Chrysler was using to assess the validity of remaining Chrysler franchisees:

1) Do you have all 3 brands?
2) Are you Five Star Certified?
3) Are you in a Metro or Rural area?
4) How close is your nearest competing Chrysler dealer?

Thankfully, all 4 of these work in my favor...we have all 3 brands, we have been Five Star certified since the inception of the program in '97, we're rural so we fly below the radar more than Metro dealers, and my closest Chrysler competitors are 35 minutes from me.

I've been told Monday, May 11th is D Day for Chrysler's "List" of terminated franchises. Sunday night will be a long, long night for me...

Jason...you seem like a nice guy, and hopefully you'll make it through this "mess" and be stronger in the end. Good luck with everything!

Jason...you seem like a nice guy, and hopefully you'll make it through this "mess" and be stronger in the end. Good luck with everything!

Thanks for the kind words...luck is something I need right now...

Gettelfinger said it best, how did the UAW get special treatment? The UAW traded billions in equity and lets face it, today that equity stands at $0.

Show me how the UAW got rewarded. They put the VEBA Trust Fun for retirees on the line with no guarantee that their gamble pays off.


What about the bondholders and shareholders? The bondholders are "secured debtors". THAT'S WHY THEY BOUGHT THE BONDS. By law, they are at the front of the line to get paid. That is, under normal BK law. These bondholders aren't just "greedy bankers", they are people. People you put their hard earned money into these bonds to fund their OWN retirement. Not only do they get shafted (without the government guarantee the unions have), but they get vilified by the administration as well. I hope the lawsuits begin in earnest.

in other news.......

The UAW gets handed 55% of the company.




Jason, I hope everything works out well for you bud. I know you'll land on your feet.

What about the bondholders and shareholders? The bondholders are "secured debtors". THAT'S WHY THEY BOUGHT THE BONDS. By law, they are at the front of the line to get paid. That is, under normal BK law. These bondholders aren't just "greedy bankers", they are people. People you put their hard earned money into these bonds to fund their OWN retirement. Not only do they get shafted (without the government guarantee the unions have), but they get vilified by the administration as well. I hope the lawsuits begin in earnest.

in other news.......

The UAW gets handed 55% of the company.




Jason, I hope everything works out well for you bud. I know you'll land on your feet.

As you know, the Union's pension funds are guaranteed. This means they're getting paid by getting stock in the new company they can sell, or they're getting paid by you and I through the Pension Benefit Guaranty Corporation. But they're getting paid on way or the other. I don't disagree that it's unfair to the bondholders and the shareholders, but the fact of the matter is that the taxpayers don't have to go ahead and pay those debtholders anyway if other arrangements can't be made.

The union have already said they won't be 55% shareholders for long:

STERLING HEIGHTS, Mich. (AP) - The United Auto Workers union has no intention of keeping its 55 percent stake in the new Chrysler and will sell the shares as soon as possible to fund a trust that will take over retiree health care costs next year, the union's president said Monday.

http://finance.yahoo.com/news/UAW-chief-says-union-will-apf-15127715.html?.v=7

I second the sentiment, Jason. I wish the best for you and your dealership.

These bondholders aren't just "greedy bankers", they are people.

There is a large contingent of hedge funds that recently bought GM bonds. The idea was they could buy them at 15 cents on the dollar, and in bankrupcy proceding, they are likly going to get a multiple factor of their initial investment as a return. 200 to 300% is certainly possible. Chrysler whent belly up at the last moment cause all the bond holders couldn't come to a consensus. Who was the hold out? Not the banks, they were good to settle, the hedge funds about 30 to 40 of them in Chryslers case. They did this for the money, plain and simple. With hedge funds there is no consideration for country, people, economic hardships of the middle class. It's simply more money to the social elite. Raping many to benefit a few. That's what our country as come too.

in other news.......

The UAW gets handed 55% of the company.

They only get one seat on the board, not much voting power for 55% of the company.

They only get one seat on the board, not much voting power for 55% of the company.

In fact, their shares will all be non-voting shares.

THOUSANDS of dealer employees will lose their jobs over this.

That's the harsh reality, middle class America losing our jobs. There's no one to represent the middle class, our representatives don't, our administration doesn't (free trade), our companies don't. Organized labor isn't a four letter word. Without it, there is no bargaining power with companies, or government. Who else is going to stand up for you the employee?

Meanwhile, the UAW keeps retiree health care. This is a concept I don't grasp for the most part, anyway.

This a benefit of organized labor. Something that used to be more prevalent, but seemingly we've been convinced by all the powers to be we don't need or want organized labor, instead we really want to have our way of life tarnished, ability to provide for our family ripped out from under neath us, we want the big man to have total control of us, yes we strive for $8 an hour, no health care, no benefits, and creation for yet another government funded social program just to survive. Where does the tax revenue come from to fund these social programs, ehhh no problem just borrow it, saddle our kids and their kids with it.

IMO (for whatever that's worth), UAW legacy costs have crippled these companies...yet they stay intact? I simply don't get it.

Or another way to look at it. The onslaught of foreign business into this country has been increasing on a scale of significant magnitude. They invest just enough to setup a retail front, and then suck the wealth right out of the country. There is nearly zero regulation to attempt to create a fair trade playing field. Where's the regulations to create balanced reciprocal trade? They are non-existent, shameful on our government and our people for not demanding such.

There's consequence for every action. The annual automotive trade deficit with Japan and Korea gets larger and larger, total trade deficit with China larger and larger every year. The consequence is we've sold ourselves right out of our own jobs and way to provide for our families. We are now being forced to accept less and less. There is a point of diminishing returns, we're now feeling the consequence of this action over the last few decades. The wealth has left the country, or is now in control by a few, this is not a situation that is primed for success of the American middle class our our country.

We wonder why the companies that have been vested in this country for a century are faltering. Look no further than to the companies that have been labeled great success stories in recent decades. They're all foreign. They've beaten America at the game of leveraging cheap labor, against a market that was rich with cash. We then borrowed up to our eye balls to sustain this level of social being, then the whole thing went bust, the bussiness are going under, our people are going under.

As you know, the Union's pension funds are guaranteed. This means they're getting paid by getting stock in the new company they can sell, or they're getting paid by you and I through the Pension Benefit Guaranty Corporation. But they're getting paid on way or the other. I don't disagree that it's unfair to the bondholders and the shareholders, but the fact of the matter is that the taxpayers don't have to go ahead and pay those debtholders anyway if other arrangements can't be made.

The union have already said they won't be 55% shareholders for long:

STERLING HEIGHTS, Mich. (AP) - The United Auto Workers union has no intention of keeping its 55 percent stake in the new Chrysler and will sell the shares as soon as possible to fund a trust that will take over retiree health care costs next year, the union's president said Monday.

http://finance.yahoo.com/news/UAW-chief-says-union-will-apf-15127715.html?.v=7

I second the sentiment, Jason. I wish the best for you and your dealership.

We all heard that legacy costs were a major factor in the difficulties for the domestic automakers.

Nothing is being substantially altered as far as I can see. I could see some wisdom in the UAW deal if it was make or break, but it isn't. One of the 800 pound gorillas is still in the room.

If nationalized healthcare is established? The UAW and FIAT make out HUGE! Just where a UAW worker for Chrysler stands in the ownership and to what degree of actual stock they get to hold hasn't been shared that I'm aware of.

I can't tell you if it's the best deal the US taxpayer can get or not. No specifics are being transparantly shown. Individual Union workers getting actual stock by some measure is one thing. The UAW as an entity getting stock the workers can't touch is another. AFAIK FIAT has ZERO skin in the game. 35% ownership ain't bad for no money spent. Best I can tell is they are in because they are willing and have cars the government thinks will sell here.

None of this gets the taxpayer off the hook for the pensions. I would have more comfort with a rationale that UAW workers get 55%, but the pensions and benefits are their own issue from this point on. If the belief is that the Union can run the company better, design better, handle costs better, then make it a make or break. Would that be changing the rules and writing new laws as you go? Yep. We are doing that anyway. Some cows are more sacred than others, apparently.

As for FIAT ending with the majority of Chrysler? So much for saving american business.

Some thoughts.

First, I recall that Chrysler has been saying they have too many dealers since the last Daimler days, before Cerberus took over. The writing has been on the wall for an extremely long time. It's especially reached something of a fever pitch the past year. Even just a few months ago, it was said both here and in the press more times than I can count that bankruptcy would mean that GM and Chrysler could pare down their dealers without having to pay anyone anything, and without any legal ramifications.

Next, the UAW didn't infact walk out with everything. They got most of a company in exchange for giving up pretty much everything except wages. If the company turns around and profits, then yes they make out big. But....If Chrysler collaspes anyway, the UAW is screwed even worse than they would have been if Chrysler simply liquidated. At least if that happened, a large part of their pensions and health care for retireees would have been backed by the US and state governments.

And they get, what, 1 seat on the board? Daimler, BMW, and Volkswagen all have at least 1 union seat on the board. Ford will likely wind up with 1 union seat on their board of directors if they have to go back to the union for more concessions. It's not the death knell of the free world, and considering that they own 55% of the company, a single seat on a board that has what? 9? 12? Members?

Chrysler's bondholders.... at least all but a couple.... have given up alot in order for Chrysler to succeed. In case no one heard, that small group is attempting to push Chrysler to liquidation because they feel Chrysler is worth more in parts than it is as a company. They simply want to close the doors and collect any cash.



It's easy to view "dealers" or "union" as a single faceless entity that's defined by the more attention grabbing, unflattering stories that are posted. Search the subject on this site, and you're likely to literally find thousands of negative refernces and maybe only a few positive. Jason, you actually puts a face and a person we know. Like everything else, regardless of negative news, most all car dealers and union members are decent, good, hardworking people who want the best deal they can get for the work they do... and unless you're lazy, there isn't a single person here whose any different.


Chrysler... like General Motors.... are car companies that have been mismanaged for so long (Chrysler externally, GM internally), that now there's alot of painful moves that have to be done. Every party involved is getting scalped, bondholders, UAW, dealers, suppliers, executives, and stockholders. Naturally, there's going to be a tendacy for members of one party feeling that another party got a better deal. If I was in a similar situation (and I very may be in a short time) I also won't be a happy camper either.

But the REAL point is.... and THIS is what really seems to get under the radar of many people.... is that General Motors and Chrysler if left alone would NOT be here today.

No dealers.

No cars or trucks.

Nothing....

..... and chances are, the vacuum would suck Ford down as well.

..... and if you wanted a new truck, car, or sports coupe, it would be made under the Nissan, Toyota, or Mitsubishi label.


Personally, I believe the way that dealers are being weeded out is grossly unfair. The GM dealer here in San Francisco that stopped selling new cars was a very good family run business that had been around for a couple of generations. It's service department was the best I've seen since Mission Ford in San Diego 20 years ago.

Hideously, it's easier to screw around with money and supply to get rid of excess than it is to do a thoughful review and keep the best.

I have no doubt that when all this is over, you'll land on your feet Jason. Just hang in there.

As you know, the Union's pension funds are guaranteed. This means they're getting paid by getting stock in the new company they can sell, or they're getting paid by you and I through the Pension Benefit Guaranty Corporation. But they're getting paid on way or the other. I don't disagree that it's unfair to the bondholders and the shareholders, but the fact of the matter is that the taxpayers don't have to go ahead and pay those debtholders anyway if other arrangements can't be made.

The union have already said they won't be 55% shareholders for long:

STERLING HEIGHTS, Mich. (AP) - The United Auto Workers union has no intention of keeping its 55 percent stake in the new Chrysler and will sell the shares as soon as possible to fund a trust that will take over retiree health care costs next year, the union's president said Monday.

http://finance.yahoo.com/news/UAW-chief-says-union-will-apf-15127715.html?.v=7

I second the sentiment, Jason. I wish the best for you and your dealership.


I understand all that. But do you think that this has to do with any reluctance of the feds to spend more money in the PBGC fund? I'd doubt it - considering the Trillions of dollars that they're willing to piss away.

Nope, what I smell here is dirty Chicago politics - but taken to a national level. This is how it works at it's most basic level: You want a new garbage can. Your Precinct Captain takes care of you and gets you a shiny new one. Come election time, the Precinct Captain comes by to tell you who you'll vote for and to put a sign of said person on your lawn. On a much larger level, what I see here, is the same thing.

Certain groups are given paybacks for supporting certain political figures. All other groups are quickly thrown under the bus and discredited.

It's corrupt. It's disgusting. It's un-American. And I hope it's tested in front of a judge.

I'd rather see our BK laws work this out properly, and if it takes a tiny, miniscule sliver of the NINE TRILLION DOLLARS our administration is eager to blow on bullsh!t, to further fund the BPGC, then so be it.

This is politics on a grand scale my friends, and it sickens me.

We all heard that legacy costs were a major factor in the difficulties for the domestic automakers.

Nothing is being substantially altered as far as I can see.


Yes, it is, the UAW is betting the farm - their pensions - on a Chrysler recovery. Please read the article I posted above. It has more details than you seem to believe are available.

If nationalized healthcare is established? The UAW and FIAT make out HUGE! Just where a UAW worker for Chrysler stands in the ownership and to what degree of actual stock they get to hold hasn't been shared that I'm aware of.

A UAW worker gets zero (0) shares in Chrysler. The VEBA will own 55% of Chrysler. The VEBA is a trust, I'd assume that should some kind of nationalized healthcare be established it wouldn't be so easy to just convert the money to luxury villas for every Carl and Luigi.


None of this gets the taxpayer off the hook for the pensions. I would have more comfort with a rationale that UAW workers get 55%, but the pensions and benefits are their own issue from this point on. If the belief is that the Union can run the company better, design better, handle costs better, then make it a make or break. Would that be changing the rules and writing new laws as you go? Yep. We are doing that anyway. Some cows are more sacred than others, apparently.

It won't get the taxpayer off the hook for pensions if Chrysler doesn't do well, but that is exactly what it is supposed to do. The 55% is for pensions. I'm not sure where the confusion is here. This is not stock for every Chrysler employee. It's an equity stake in the company to fund the VEBA.

The pensions and benefits are not their own issue. They are the only issue the 55% stake is tied to.

As for FIAT ending with the majority of Chrysler? So much for saving american business.

American Jobs. I'm sure Jason would rather be employed by Fiat then unemployed as will the American workers building Chryslers, Jeeps, Alfas and Fiats.

I understand all that. But do you think that this has to do with any reluctance of the feds to spend more money in the PBGC fund? I'd doubt it - considering the Trillions of dollars that they're willing to piss away.

Nope, what I smell here is dirty Chicago politics - but taken to a national level. This is how it works at it's most basic level: You want a new garbage can. Your Precinct Captain takes care of you and gets you a shiny new one. Come election time, the Precinct Captain comes by to tell you who you'll vote for and to put a sign of said person on your lawn. On a much larger level, what I see here, is the same thing.

Certain groups are given paybacks for supporting certain political figures. All other groups are quickly thrown under the bus and discredited.

It's corrupt. It's disgusting. It's un-American. And I hope it's tested in front of a judge.

I'd rather see our BK laws work this out properly, and if it takes a tiny, miniscule sliver of the NINE TRILLION DOLLARS our administration is eager to blow on bullsh!t, to further fund the BPGC, then so be it.

This is politics on a grand scale my friends, and it sickens me.

No politics on the forums. Just the details of the VEBA, Chrysler and UAW deal, no?

Yes, it is, the UAW is betting the farm - their pensions - on a Chrysler recovery. Please read the article I posted above. It has more details than you seem to believe are available..

I trust you finding of the info and thanks. I feel much better that the UAW "bet the farm" on the VEBA funding. I'm not sure the "farm" is gone if the pensions are still government backed.

As you have a finger on the info, what is the funding for salaried employees and their pensions? Is FIAT paying those out of their portion, the UAW out of theirs, or the government out of theirs?

As for what nation Jason would like to be paid by is his own business. As a taxpayer, I'm not keen on helping a foreign company to pay anyone or help finance a foreign takeover.

I hope it goes well. If anyone thinks FIAT won't pull the plug if it strikes them to do so, think again. What's left will still be "too big to fail".

This plan does not resolve the REAL issues, nor does it save any american car company. I hope it's cheaper than just taking the pensions on. For the sake of the taxpayer and economy, the pension guarantees have to go or rates be escalated to match the risk.

Sergio Marchionne isn't a car guy. The quip going around Italy goes something roughly translated: "Fiat's saving Chrysler, but who's going to save Fiat here in Italy?" I don't think he's interested in much other than selling FIATs here. I do hope it works out for people.

Next, the UAW didn't infact walk out with everything. They got most of a company in exchange for giving up pretty much everything except wages. If the company turns around and profits, then yes they make out big. But....If Chrysler collaspes anyway, the UAW is screwed even worse than they would have been if Chrysler simply liquidated. At least if that happened, a large part of their pensions and health care for retireees would have been backed by the US and state governments.
So once the UAW gets 55% of the company the government is then off the hook for their pensions and heathcare. That doesn't seem likely but would make the deal a lot more palatable.



It's easy to view "dealers" or "union" as a single faceless entity that's defined by the more attention grabbing, unflattering stories that are posted. Search the subject on this site, and you're likely to literally find thousands of negative refernces and maybe only a few positive. Jason, you actually puts a face and a person we know. Like everything else, regardless of negative news, most all car dealers and union members are decent, good, hardworking people who want the best deal they can get for the work they do... and unless you're lazy, there isn't a single person here whose any different.

This is an excellent point. I am about as anti union as anybody but I don't fault the workers themselves. There are a lot of dealerships that deserve to go out of buisness in my opinion but that doesn't mean the employees deserve to lose their jobs. In the same way you can't blame the unions and union workers for wanting the best compensation they can get for the work they do. We all want that. Its a terrible shame that a lot of good people are going to lose their jobs over this whole mess through no fault of their own.

As for what nation Jason would like to be paid by is his own business. As a taxpayer, I'm not keen on helping a foreign company to pay anyone or help finance a foreign takeover..

This plan does not resolve the REAL issues, nor does it save any american car company. I hope it's cheaper than just taking the pensions on. For the sake of the taxpayer and economy, the pension guarantees have to go or rates be escalated to match the risk.

But what's the real alternatives?

Chrysler was ready to go under this summer. GM was going to go under last January. The entity who kept the company going, or the nationality of who's steping in to turn it around, or even the prospect of them MAYBE leaving at a later date is completely irelevent. Are you going to critize Roseanne Barr for giving you CPR that saved your life that she can't sing and doesn't look like Catherine Zeta-Jones, or are you going to say "Well.... at least I'm still alive and I can still provide for my family"?

Roseanne might be the last person you'd want to open your eyes and see, but you'd still owe her a thank-you note, and a birthday present.


A driver of a school bus full of kids suddenly has a heart attack and dies as the bus is careening down a mountain road headed for a cliff. A kid jumps into the driver's seat and steers the bus around the 1st turn and keeps it from plunging over that cliff, but there's lot's more turns and dropoffs, every bit as serious, but not quite as bad.

Are you going to give a hoot where that kid is from, what club or click he belongs to, or even the fact that the kid doesn't even have a drivers's license? I doubt if you are even going to be concerned if the kid bangs up the bus a bit in the process of saving those other kids lives.

Maybe the kid will drop out of school later. Maybe the kid will punch another in the nose when the bus finally stops. Maybe the kid will become a transvestite drag queen turning tricks in a skidrow bathhouse for an X-box 1000.

Truth is that right now none of that matters, because instead of a bus full of dead kids, you have a bus full of live ones.... while everyone tries to figure out how to bring the thing to a safe stop before the next cliff.


Again, with the short time available, and the alternatives, there had to be very quick action. If there wasn't quick action, there would be a whole lot of people...everyone, actually.... at both Chrysler and GM who wouldn't have a job today.

GM and Chrysler (and Ford) are simply way too important to let politics and petty preferences stand in the way of keeping them going, and returning them to profitability.

I trust you finding of the info and thanks. I feel much better that the UAW "bet the farm" on the VEBA funding. I'm not sure the "farm" is gone if the pensions are still government backed.

Good point, but I guess my hope is Chrysler recovers and this isn't an issue.

As you have a finger on the info, what is the funding for salaried employees and their pensions? Is FIAT paying those out of their portion, the UAW out of theirs, or the government out of theirs?

To my knowledge this hasn't been determined. Obviously (and I'm sure this is your point) they won't make out as well as the UAW. I believe that the salaried retirees have retained representation and are a party in the bankruptcy proceedings.

As for what nation Jason would like to be paid by is his own business. As a taxpayer, I'm not keen on helping a foreign company to pay anyone or help finance a foreign takeover.

Are you keen on keeping American jobs for American taxpayers? I just prefer some Americans in a job to none of them. I know it's semantics, but it won't be a foreign "takeover" unless Chrysler does succeed. FIAT can't take majority ownership unless the government is paid back.

I hope it goes well. If anyone thinks FIAT won't pull the plug if it strikes them to do so, think again. What's left will still be "too big to fail".

I'm more scared of FIAT biting off more than they can chew and pooching everything top to bottom than I am of them pulling out at this point.

This plan does not resolve the REAL issues, nor does it save any american car company. I hope it's cheaper than just taking the pensions on. For the sake of the taxpayer and economy, the pension guarantees have to go or rates be escalated to match the risk.

I'd have no problem with eliminating the pension guarantees. I agree, let the UAW take the risk along with the investment (just as other investors have).

Sergio Marchionne isn't a car guy. The quip going around Italy goes something roughly translated: "Fiat's saving Chrysler, but who's going to save Fiat here in Italy?"

Like I said above, that's the part that scares me. Marchionne is trying to build a juggernaut to take advantage of "economies of scale" and "wide distribution." Because that worked so well for GM? I'd rather see them concentrate on the Chrysler deal.

I don't think he's interested in much other than selling FIATS here.

I don't either. But if Americans are building and selling them its still preferable to me to Chrysler liquidated and their entire workforce out of a job.

It won't get the taxpayer off the hook for pensions if Chrysler doesn't do well, but that is exactly what it is supposed to do. The 55% is for pensions. I'm not sure where the confusion is here. This is not stock for every Chrysler employee. It's an equity stake in the company to fund the VEBA.

The pensions and benefits are not their own issue. They are the only issue the 55% stake is tied to.


I believe he is saying he would be more comfortable if the 55% stake in chrysler took the government off the hook for the Pensions and benefits. Not that the pensions and benefits be a seperate issue from the 55%


[QUOTE]None of this gets the taxpayer off the hook for the pensions. I would have more comfort with a rationale that UAW workers get 55%, but the pensions and benefits are their(the UAW) own issue from this point on[\QUOTE]

But what's the real alternatives?

Chrysler was ready to go under this summer. GM was going to go under last January. The entity who kept the company going, or the nationality of who's steping in to turn it around, or even the prospect of them MAYBE leaving at a later date is completely irelevent. Are you going to critize Roseanne Barr for giving you CPR that saved your life that she can't sing and doesn't look like Catherine Zeta-Jones, or are you going to say "Well.... at least I'm still alive and I can still provide for my family"? .

Guy, YOU feel it's irrelevant how Chrysler gets saved, not me. It matters to me where my money goes. I don't mind spending my money to keep a US manufacturer as a US manufacturer. I'm gratified jobs will remain, however many that may actually be. We will see if Chrysler remains after this as anything more than a name on corporate letterhead.

As for Roseanne providing a life saving procedure for me? I'd very grateful for the reprieve, but if she stole my wallet and gave me aids in the process it wouldn't be the happiest moment of my just saved life...


GM and Chrysler (and Ford) are simply way too important to let politics and petty preferences stand in the way of keeping them going, and returning them to profitability.

The ends don't always justify the means Guy. I agree that politics shouldn't be a driving force, nor any petty preferences. That's exactly what bothers me about the handling of this. An off the docket bankruptcy was being attempted and I would rather see the rule of law be immune from what's considered expeditious.

In case anyone thinks I'm worried about my own pension with GM and that directs my thought about the Chrysler deal, rest at ease, I don't have a pension with GM. I get paid when I work, not when I don't.

I believe he is saying he would be more comfortable if the 55% stake in chrysler took the government off the hook for the Pensions and benefits. Not that the pensions and benefits be a seperate issue from the 55%




Yes, exactly. A big incentive to make the company viable. A desparate need if you will.

Hate to show some ignorance on this, but it is my impression half of what the VEBA requires is being "loaned" in installments from the US and Canada. The 55% of Chrysler is to cover the other half remaining.

Also healthcare benefits for vision and dental are being removed. The compensation for a layoff UAW worker is 50% of gross pay and not the previous higher amount.

I haven't read the deal, but apparently it's out there to read. I haven't found it.

FIAT starts at 20% ownership of Chrysler and picks the CEO and up to a certain number on the BOD. FIAT gets 35% of Chrysler for meeting certain requirements. Likely tied to building fuel efficient and green cars in US UAW plants. UAW/VEBA has a seat on the BOD without a vote.

Later FIAT can purchase controlling interest, from the UAW/VEBA perhaps, or some or all of the the 10% of the government portion. 1% is what will be for present stockholder stock holders. Some bond and debt holders have agreed to somewhere around 33 cents on the dollar, cash to be paid by the taxpayers. Some bondholders passed on an supposed 2.2 billion and no stock offer against the 6.7 billion in senior debt. I have heard nothing about any settlement for non-union worker's pensions nor healthcare.

**EDIT- According to the New York Times the remaining bondholders unwilling to accept the government settlement offer total $295 million in senior debt. None have received TARP money and none hold credit default swaps. The article states that an unstated number that have accepted the government offer have been TARP fund receivers. The group seeking bankruptcy court judgement requested the names of those companies involved to be sealed in the light of death threats made against the group. The judge denied the request. The article states some have dropped out of the group.****


As FIAT can't provide any product for a while, I haven't seen anything solid about where the operating capital is coming from.

I'd love someone who knows provide accurate info on who gets what. If there's a definitive agreement to be read, I'd love to see it.

I have no skin in the deal other than my tax dollars.

First, I want to say thanks to the people wishing me well. This has not been an easy road for me since last summer. Its amazing to think that this time last year, I was watching gas prices climb and climb, people dry up on my lot, and was wondering when it would all end.

It never dawned on me that a year later, this is where we'd be, and how things were better THEN....

Anyway, I want to touch on a matter argued about between Eric and 1fastdog. I absolutely, unequivocally, WANT to work for a dealership that sells US made goods to US citizens. I want those citizens to support us, and the workers building these cars, and the American engineers and stylists that bring us these cars. However, in this day and age, I feel like I'm in the vast minority of people that even remotely care anymore.

America, as a country, sells itself to the lowest bidder, throws nationalism aside, and buys what it THINKS is the best thing for them, whether it actually is or not. No thought is given to supporting your neighbor, your fellow American, or keeping money within these borders. Too many people, simply, just do not care.

I can see both sides of this argument clearly. 1fastdog, I was overjoyed when Chrysler got away from Daimler. I finally worked for a truly AMERICAN institution. And wow, did Cerberus do a good job of hiding what it really wanted. When Steven Feinberg (head of Cerberus, for those who don't know) said to the press that he wanted to "revive an American Legend," or whatever he actually said, dealers bought it. We truly thought this would be a period of possible renaissance for Chrysler.

What we got was a millitant hedge fund operator that tried to dump us at the first sign of bad news.

The bottom line? I'm not crazy about the Fiat parentage, or the fact that the government is financing the move, but in my mind its better than hundreds of thousands of people losing their jobs. Maybe you're cutting off your face to save your nose here...I don't know. But I can see Eric's side, too...its saving a LOT of jobs, no matter how many are shed in the process...and its a painful process.

I did get a decent sign of hope for my dealership particularly, in that we're receiving incentive payments on Monday. If I've read the Treasury crap right, we wouldn't be getting payment if we were being cut...so I pray that's my olive branch from Chrysler. They've moved D Day back to next Friday.

Its gonna be a long, long week...

First, I want to say thanks to the people wishing me well. This has not been an easy road for me since last summer. Its amazing to think that this time last year, I was watching gas prices climb and climb, people dry up on my lot, and was wondering when it would all end.

It never dawned on me that a year later, this is where we'd be, and how things were better THEN....

Anyway, I want to touch on a matter argued about between Eric and 1fastdog. I absolutely, unequivocally, WANT to work for a dealership that sells US made goods to US citizens. I want those citizens to support us, and the workers building these cars, and the American engineers and stylists that bring us these cars. However, in this day and age, I feel like I'm in the vast minority of people that even remotely care anymore.

America, as a country, sells itself to the lowest bidder, throws nationalism aside, and buys what it THINKS is the best thing for them, whether it actually is or not. No thought is given to supporting your neighbor, your fellow American, or keeping money within these borders. Too many people, simply, just do not care.

I can see both sides of this argument clearly. 1fastdog, I was overjoyed when Chrysler got away from Daimler. I finally worked for a truly AMERICAN institution. And wow, did Cerberus do a good job of hiding what it really wanted. When Steven Feinberg (head of Cerberus, for those who don't know) said to the press that he wanted to "revive an American Legend," or whatever he actually said, dealers bought it. We truly thought this would be a period of possible renaissance for Chrysler.

What we got was a millitant hedge fund operator that tried to dump us at the first sign of bad news.

The bottom line? I'm not crazy about the Fiat parentage, or the fact that the government is financing the move, but in my mind its better than hundreds of thousands of people losing their jobs. Maybe you're cutting off your face to save your nose here...I don't know. But I can see Eric's side, too...its saving a LOT of jobs, no matter how many are shed in the process...and its a painful process.

I did get a decent sign of hope for my dealership particularly, in that we're receiving incentive payments on Monday. If I've read the Treasury crap right, we wouldn't be getting payment if we were being cut...so I pray that's my olive branch from Chrysler. They've moved D Day back to next Friday.

Its gonna be a long, long week...

I wish you the absolute best my friend.

We agree on saving jobs, not doubt about it.

Amen, regarding folks not giving much thought to their purchases and that's their right. I wish it were different and that folks really made full decisions about what they buy, if they don't.

Regarding FIAT? I hope it works. Tax breaks to locate a company are one thing, handing over a company is quite another to me.

America, as a country, sells itself to the lowest bidder, throws nationalism aside, and buys what it THINKS is the best thing for them, whether it actually is or not. No thought is given to supporting your neighbor, your fellow American, or keeping money within these borders. Too many people, simply, just do not care.

As a Canadian that visited China a few months ago and saw first hand how much price protection Chinese goods have over imports, I couldn't agree more with this statement. There would be riots in the streets if that happened in the USA. :(

Hopefully it all works out for you Jason!

Jason E -- Chrysler Corp was never really viable as a small North American-only automaker with a lower market position.

I think if you go back and look at the press at the time of the Cerberus takeover, there was a lot of speculation that Chrysler would be married off to another international consortium. (Renault-Nissan usually topped the list.)

Dodge dealer just disapeared down the street from me. One day there were Dodge Chargers ( with 22's) and a Viper in the show room. 2 days later, empty.

I feel like I'm in the vast minority of people that even remotely care anymore.

That's the true core issue here. This is becoming more prevalent in America. We're losing our pride of country, pride in our people, pride in our history and the sacrifices that brought us here. Pride and striving for the American ideals is becoming non-existent. We are simply losing our sovereignty as people of this great country. Instead we are becoming a commonwealth of immigrants, and not becoming a true Americans, first and foremost.

So this leaves us with Me, My, I, without any compassion or care for anyone else or thing. A country is no greater than it's people.