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Chrysler Closes All Plants For 1 Month
Automaker Says Its Short On Cash

POSTED: 3:25 pm MST December 17, 2008
UPDATED: 3:31 pm MST December 17, 2008


Chrysler said it will close all 30 of its manufacturing plants for a month starting Friday.

The company needs to match production to slowing demand and conserve cash.

Tighter credit markets are keeping would-be buyers away from their showrooms, Chrysler says. Dealers are unable to close sales for buyers due to a lack of financing, and estimate that 20 to 25 percent of their volume has been lost due to the credit situation.

Chrysler claims it is nearing the minimum level of cash it needs to run the company and will have trouble paying bills after the first of the year.

Operations at the 30 plants will be idled at the end of shift on Friday, Dec. 19, and will not come back online until Jan. 19, 2009, or later.
http://www.kpho.com/automotive/18301870/detail.html?treets=pho&tml=pho_natlbreak&ts=T&tmi=pho_natlbreak_-1_04310112172008
 

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They just annouced the story about Chrysler on the local news in Austin.
 

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More on the bail out:

Bush Considering 'All Options' For Big 3
Haggling Over Scope Of Bailout Continues

POSTED: 7:03 am MST December 17, 2008
UPDATED: 7:24 am MST December 17, 2008


The White House is downplaying any expectations that a Big Three automakers rescue plan will happen soon, even as President George W. Bush said his administration is "considering all options" for helping the domestic auto industry.

Bush made his comments in an interview broadcast Tuesday by CNN.

One option would use part of the $700 billion financial rescue fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans.

But conservative Republicans are opposed to using that money to save any of the Big Three.

A senior GOP congressional aide said the White House and Treasury Department are in talks with Republican Sen. Bob Corker, who's been seeking big union concessions in exchange for rescue money.

Rep. Barney Frank, D-Mass., meanwhile, said the government should have oversight powers along with providing relief for the automakers, including veto power over the companies' business decisions.

"Given the serious mistakes that senior auto industry executives acknowledge they have made in the past, such safeguards are absolutely necessary to ensure that taxpayers are protected and that the retooling of this critical industry proceeds as quickly as possible," Frank said, in urging Treasury Secretary Henry Paulson to adopt the accountability provisions in a House-passed auto bailout bill as a condition of any bridge loans to automakers.

White House press secretary Dana Perino said the Bush administration is still working out details of the package and is "not going to be rushed into it."

The White House wants to hear more from all those involved, including key lawmakers and those in the industry. She also said concessions will need to be made in exchange for a rescue package that reportedly could reach $15 billion for General Motors and Chrysler.

The goal is preventing a "disorderly bankruptcy," Perino said.

Distributed by Internet Broadcasting Systems, Inc. The Associated Press contributed to this report. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
http://www.kpho.com/automotive/18297785/detail.html
 

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I'll bet those folks at Cerberus are pretty unhappy these days. Not only did they buy a tanking Chrysler, but they also invested heavily in GMAC mortgage lenders. Remember when they purchased GMAC lending from General Motors a while back? Talk about some unfortunate moves!

I wonder how long a private equity firm like Cerberus can survive themselves after so many bad decisions...
 

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I heard on the news tonight that all the employees will receive their normal pay, so for them it is a 30 day paid vacation during the holidays.
 

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Chrysler's also changing the terms of their "floor plan" financing for dealers: they're going to start charging them 10% of the cost for any 2008 models on the dealer lots more than 360 days, and 50% on all 2009s on lot for more than 360 days. This is to help recoup finance costs, motivate sales and possibly cull more underperforming dealers from the herd.

Here's the link to the WSJ article: http://online.wsj.com/article/SB122953853010114835.html?mod=djemTEW
 

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I heard on the news tonight that all the employees will receive their normal pay, so for them it is a 30 day paid vacation during the holidays.
Only union employees according to my sources.
 

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Only union employees according to my sources.
That is correct....

...and the plants are 'normally' closed 2 weeks during the holidays anyway...so really...what's another two weeks?
 

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Here is an update on the bailout:

GM, Chrysler To Receive $17.4B In Loans
Funds To Come From $700B Rescue Package

POSTED: 6:38 am MST December 19, 2008
UPDATED: 7:19 am MST December 19, 2008


The Bush administration came to the rescue of the troubled U.S. auto industry Friday, offering $17.4 billion in loans in exchange for concessions from carmakers and their workers.

President George W. Bush made the announcement on the auto bailout during a news conference Friday morning.

"Allowing the auto companies to collapse is not a responsible course of action," Bush said. He said that a bankruptcy was unlikely to work for the auto industry at this time and would deal "an unacceptably painful blow to hardworking Americans" across the economy.

Prior to the news conference, a senior administration official said $13.4 billion in short-term financing will be drawn from the $700 billion Wall Street rescue program, with another $4 billion to be added later.

The firms must use these funds to become financially viable, or lose the taxpayer money. The official said if the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.

The Detroit Three have nearly 100,000 employees at plants around Ohio.

Copyright 2008 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
http://www.kpho.com/automotive/18315980/detail.html?treets=pho&tml=pho_natlbreak&ts=T&tmi=pho_natlbreak_-1_08150112192008
 
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