Thursday, December 18, 2008

Chrysler to idle 46,000 workers

Today Chrysler Corporation announced that it is going to idle all 30 of its North American plants for at least 1 month and some plants will be idled until at least February. This impacts 46,000 workers. With the relative inaction of Washington politicians, there is a chance that Chrysler may have to consider an orderly bankruptcy.

And as the Automaker CEO's have mentioned before, if customers are concerned about a potential bankruptcy, they stop buying cars... You can see from the Detroit Free Press chart below that there is a growing amount of Chrysler inventory in the market place.



Another big issue concerning Chrysler, and possibly General Motors, in the case of "an orderly bankruptcy" is the impact it will have on the auto-dealers. Many people don't realize it, but the thousands of dealers out there are generally unsecured creditors of the Auto Companies. Every month or quarter, the Automakers provide payments to the dealers to cover expenses/revenues surrounding such things as warranty repairs, dealer holdback, and showroom financing---If a bankruptcy occurs and all the creditors start lining up to get their share of payments, I fear that many dealers will not be able to survive based upon the "credit" that they extended to the OEM's.

1 comment:

Ray said...

There are still high paying jobs on certain job sites -

www.linkedin.com (professional networking)
www.careerbuilder.com (keyword job search)
www.realmatch.com (matches jobs based on skills)

good luck to those looking.