Perhaps the most glaring sign demonstrating just how desperate the automaker is, Chrysler is putting as much as $6000 in cash incentives on most of its new 2009 vehicles. The incentives, which began yesterday and continue through June 1, 2009, are the steepest and most wide ranging yet for the beleaguered automaker, a company currently under bankruptcy protection and seeking to emerge leaner and part of Fiat’s global network within the next few months.
Save Big Bucks On Your Favorite Ride
At stake for the Chrysler, Jeep or Dodge shopper is $4000 consumer cash; $1000 in loyalty cash for current Dodge, Jeep and Chrysler owners; and an additional $1000 if buyers decide to finance their purchase through participating credit unions. This could mean that the buyer of a 2009 Dodge Caliber SXT Sport Appearance with an MSRP of $19,610 may be able to get that car for just $13,610 with all incentives included.
Chrysler says that more than 1,500 credit unions in all 50 states are participating in what is called the “Invest in America” program, a plan offering qualified credit union members low-rate financing on new vehicle purchases as well as that $1000 cash bonus.
Chrysler Loses Billions, Files For Bankruptcy Protection
Bankrupt Chrysler LLC lost billions of dollars in 2008, but because the company was part of a private equity firm, Cerberus Capital Limited, LP during that time, it wasn’t required to share financial data. Some reports have pegged Chrysler’s 2008 losses at $8 billion while others have said that they were as high as $17 billion which may have included factoring in loss revenue due to a precipitous drop in sales.
Right now, Chrysler has shut down most of its factory network in a bid to reduce inventory and to trim model lines. The plan has Chrysler restarting factory production when it emerges from bankruptcy, an ambitious plan that the Obama administration hopes will be completed within sixty day’s of its April 30th filing.
The American Taxpayer’s Gift To Chrysler
Buried inside of the bankruptcy filing was a notation that Chrysler would NOT repay more than seven billion dollars in monies lent by American taxpayers since late last year. Specifically, the automaker would be forgiven the $4 billion bridge loan offered by the Bush administration at year end 2008, a related $300 million fee on that loan as well as the $3.2 billion in financing approved by the Obama administration to help see the automaker through bankruptcy.
Like it or not, Chrysler is the automaker’s version of AMTRAK, a government supported subsidiary that the Obama administration hopes to unload on Fiat this summer. Next up is GM whose own restructuring is certain to make Chrysler’s arrangement look like child’s play.
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