Automotive News [sub] reports that President elect Barak Obama is calling on automakers to develop sustainable business models. Aparently, it would be unacceptable “to keep them on their lifeline through taxpayer dollars in perpetuity.” Although Obama admits he’s not an industry “expert”, he claimed making the bailout work means everybody, “from labor to management to creditors to shareholders, giving something up.” Specifically, taxpayers will now be sacrificing $1.5b to Chrysler Financial. And yes, it’s coming from the second half of TARP, so it has the O-man’s blessing. And so… “Zero percent interest financing will be [immediately] available on 11 Chrysler LLC vehicles, and in many cases for up to 60 months. Vehicles included in the program are Chrysler Town & Country, 300 and 300C, Jeep Grand Cherokee, Commander, Wrangler, Dodge Grand Caravan, Charger, Magnum, Challenger, Ram Pickup and Ram Heavy Duty.” Oh wait, that’s our sacrifice too. And isn’t this how we got in this mess in the first place?
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Well, as the leadersheep at GM and Cryslur are obviously not experts on how to succeed in this industry either I think we can give Barry a pass.
Bunter
(heavy sigh….)
Whatever. Wake me when this sad chapter in our history is over.
@TexN
You are going to get years of rest.
@bluecon
I started laughing at your comment because it IS funny, but then I stopped… and got really sad because it IS true also.
Our government is out of control. I wish more people realized this.
Telling us that it’s going to take sacrifice on everybody’s part is nothing new, and broad generalizations like this get us nowhere.
“from labor to management to creditors to shareholders, giving something up.”…eventually. Until then we’ll keep shoveling money in their direction hoping the problem will go away.
A $45,000 Ram loaded up with the goodies would be $750 a month. Not necessarily a purchase for those having trouble making the house payment. Zero percent will sell some cars but not what Chrysler needs to stay afloat.
I’ll take one(1) new Ram Pickemup Reg cab, long bed, my offer is $10,000 OTD. 60 months 0% finance, no down. Where do I sign? I’ll pick it up tomorrow. My FICO is 805……Email me the VIN# so I can notify my insurance co.
Spyder
News like this makes me even angrier toward the big Mexican Detroit auto industry. Our government is printing monies if like it monopoly monies. We tax payer, and ours children’s are going to pay for all the bail-out for many many generations.
So…. we’re subsidizing a pre-liquidation sale?
I knew it. Here’s your reason for the end of Chrysler’s production hiatus.
To keep this whole bailout thing in control, we cannot just give politicians unlimited power with no strings attached.
I propose that, for whatever bailout packages passed, each supporting senator has to put down 1/1,000,000 of his own money as collateral.
For example, if Chrysler is to get $1.5B, then each senator that supports the bill should put down $1,500. They get it back, together with interest, whey Chrysler pays that money back. That way, we will have far more organized and responsible bailouts.
Wait, did that say Magnums? They still have Magnums? Didn’t they stop making those a year ago? And why do I still want one?
@ wsn: Good in theory but you know Cerberus lobbyists would give the senators the 1500.
0% for Credit people with iffy credit in a very down economy.
Sounds like they they are pulling a Mitsubshi and fueling today’s sales profits with tomorrows captive finance arm fiasco. The icing on the cake is they are doing it with our tax dollars.
@Seth L:
Because they’re awesome?
My FICO is way over the minimum, I’ll be headed out to pickup my black-on-black Challenger SRT-8 tomorrow!
The thing is, a 620 really isn’t all that bad of a score. It is a little below average, but there are plenty of hard working and generally upright people out there who have been hit by the poor economic times and had things drop a little bit, but who would make most if not all of their payments on time.
Special finance vs. rebates can help keep the resale value of a vehicle up. After all, if you can buy a 2008 new on the lot Ram for $10,000 off, that is going to kill the value of used ones, which will further diminish the value of the new ones, which will, well, you get the picture. Giving a special interest rate but keeping the selling price higher helps keep depreciation under check.
In the economic crunch offering cheap credit to help people out isn’t a bad idea. Big rebates tend to help out cash buyers, but since 90% (well, I just made that number up, but I’d bet it’s near accurate) of people finance, the 0% ends up saving them more in the long run, and, as an added bonus let’s them keep whatever cash they have handy to help their families through the lean months ahead.
While Ford’s employee pricing has certainly helped us keep sales up, I think we would have had an even better time of it if we’d just announced 0% x 72 mos on everything on the lot.
Just to note-I’m giving BO a pass on not being an automotive expert.
For wasteing our money-no way.
jgh-ya, probably.
wsn-great idea…in our dreams.
Bunter
Why is everyone so unhappy ? With the Bank Bailout, at least insisting on a 620 FICO for car buyers reeks of sound lending.
That’s a lot more than we expected of the banks, for the billions they got.
Detroit is getting scraps from the table, like a family dog. The finance industry is having a food orgy on the table above.
You are outside, in the cold weather, looking in.
We’ve done about all we can with low interest rates and easy money to boost the economy and we’re getting into a “can’t push on a rope” situation.
I think this Hyundai TV ad is pitch perfect in how to get customers into the showroom in early 2009.
http://www.youtube.com/watch?v=bVAWviuVmK4&feature=related
http://www.measuringupblog.com/measuring_up/2009/01/were-all-in-this-life-boat-together.html
Maybe some customers can’t get financing, but many more could buy today, but don’t because they’re worried about losing their job.
Seth L, there is a new Magnum wagon at the Chrysler dealership near me (north Toronto). Better still, the front end closely resembles the 300 (which makes it look waaaay better). And the salesmen are ok too! (Not a paid endorsement.)