Chrysler's Post-Bankruptcy Parts Buyback - Input Requested

[XDCX]

Under pressure from Senator Hutchison, Jim Press has indicated that Chrysler will repurchase qualified parts from OLDCO dealers for an "average transaction price for all parts already redistributed."

While I think it's fantastic Senator Hutchison has kept pressure on Chrysler to treat the OLDCO dealers fairly, I don't think Chrysler's agreement goes far enough. There should be a guaranteed minimum payment percentage so dealers can make intelligent decisions on what to do with their inventory of Mopar parts.

Here's where I want your input - What's a reasonable percentage to demand?

My goal is to get Chrysler to commit to a minimum percentage or the average transaction price, whichever is greater.

Please share your thoughts and I'll work on a Press Release and a Blast FAX. :)

[F&I Pro]

I spoke with my parts mgr, he states that if he were going to buy parts from OLDCO probably max out at 50-55% and that if they COULD return parts, after freight chargebacks etc., the most they could expect from Chrysler would be around 65%.

[XDCX]

I spoke with my parts mgr, he states that if he were going to buy parts from OLDCO probably max out at 50-55% and that if they COULD return parts, after freight chargebacks etc., the most they could expect from Chrysler would be around 65%.

Perfect, thank you for taking the time to check with your Parts Manager. :)

I'm thinking that Chrysler should go on record now with a guarantee of 85% so the OLDCO dealers know where they stand. I just want some feedback to make sure 85% is a reasonable percentage before I try to generate some media support.

OLDCO Dealers - would a 85% guarantee from Chrysler be reasonable?

[possum]

85% would be fair enough.

[okcarl]

I know when we were discussing the situation with our parts manager that with all of the credits you get from Chrysler on parts ordered from them that the stores buying Oldco inventory would loose. That the dicount to have it start to make sense is about 25% So we have in turn been offering all of our parts to the remaining dealers at a 25% haircut.

[Kitfox]

OKcarl, Off the subject but the WSJ did an article yesterday on a bank in your town that grew fast and now colapsed. Made it sound like they were good old boys but not following sound banking practices. Any thoughts on this???

[okcarl]

OKcarl, Off the subject but the WSJ did an article yesterday on a bank in your town that grew fast and now colapsed. Made it sound like they were good old boys but not following sound banking practices. Any thoughts on this???

Not following sound business practices is to say the least. The straw that broke the camels back was the 50 million that they loaned to a dairy farm here in the area. There is ongoing litigation with the bank suing the farm the farm suing the bank owner etc. with some IRS involvement as well. There was some real kinky debt swap stuff going on involving the farms loan officer at the bank. Some how the loan officer's family was involved in the deal with some kind of cow lease back.

The next problem is going to be the 50 to 60 million that the bank loaned to small businesses in the area. Most of these businesses should not have qualified for the loans in the first place and now with the economic situation these business are having a hard time finding new financing to pay back the origional loans that the Fed has called due as a result of the bank closing.

The reprocussions of this banks decisions will be felt here for quite some time. I am quite surprised that this made the national news.

[Kitfox]

Thanks for your input. I have served as a director of a bank in this area for 15years and like to follow those issues. We also do a lot of agriculture/dairy loans, even though they are feeling lots of stress they have been one of our best portfolios. Our area has over 12% unemployment and we have certainly seen some increase in deliquencies but overall we are very healthy and avoided the stench that plaqued many larger banks. So, I get my daily does of stress from the financial and automotive sectors.

[XDCX]

85% would be fair enough.

Thanks for the input. To the extent Chrysler only seems to respond to pressure, I'm hoping to get enough OLDCO support for this idea that it becomes worthy of media attention. (I spoke with the WSJ today.)

[PETE HONDRU]

under pressure from senator hutchison, jim press has indicated that chrysler will repurchase qualified parts from oldco dealers for an "average transaction price for all parts already redistributed."

while i think it's fantastic senator hutchison has kept pressure on chrysler to treat the oldco dealers fairly, i don't think chrysler's agreement goes far enough. There should be a guaranteed minimum payment percentage so dealers can make intelligent decisions on what to do with their inventory of mopar parts.

Here's where i want your input - what's a reasonable percentage to demand?

my goal is to get chrysler to commit to a minimum percentage or the average transaction price, whichever is greater.

Please share your thoughts and i'll work on a press release and a blast fax. :)
ithink they should buy back parts at dealer net current book.just like they would have done in the past with a dealer surrendering his franchise.it is already detailed in our sales&service agreements.
No big deal for them.they can resell them out of their depots to another dealer.

[dodgequality]

In my negotiations, I am being told that our Service DM is telling Newco Dealers that the going rate is 40%.
From day one this whole rejected process has been immoral!
Chrysler should take all parts back at cost less a handling fee. 10%?
My haircut, right now, has extended to my privates. Pretty soon they will be shaving my legs.
Good to have you on board Peter.

[XDCX]

ithink they should buy back parts at dealer net current book.just like they would have done in the past with a dealer surrendering his franchise.it is already detailed in our sales&service agreements.
No big deal for them.they can resell them out of their depots to another dealer.

Pete - First post - Welcome to DealershipForum :wave:

While I agree that Chrysler "should" repurchase the parts at Dealer Net, my hope that they'll ever do the right thing has long since faded. :(

It appears that Press is capable of testifying before Congress that Chrysler's found buyers for 80% of the parts inventory without disclosing the price. The way he constantly shades the truth, I don't know how he can sleep at night?

I'm going to continue to try and make an issue of this and see if I can generate some media interest. I've concluded that Chrysler won't do the right thing unless they're forced to do the right thing.

[RCR3]

Pete's my boss,I'm proud to say.

[XDCX]

Pete's my boss,I'm proud to say.

That's awesome, it's great to have some new members who are willing to share their thoughts/ideas. :)

What are you hearing in your area as the going rate for OLDCO parts? It seems like some dealers are getting offers of 40 - 60 cents on the dollar. :(

[srt]

Since June9th I have not received a serious offer on my inventory that is approx 160,000. A few calls to the business center and the field person have been largely ignored. This whole mess has been poorly handled by all concerned and should be addressed by the political base in Washington as their hands are not clean. tHIS COMPANY HAS A SERIOUS PUBLIC INVESTMENT AND SHOULD BEGIN TO ACT IN A RESPONSIBLE MANNER TO MAKE THINGS RIGHT WITH THE REJECTED DEALER BODY.

[possum]

Chryslers plan is basically listing your parts on "Craigslist", and see if there are any takers. There is no real "plan", but they are buying time and stalling untill we are gone.

[XDCX]

Since June9th I have not received a serious offer on my inventory that is approx 160,000. A few calls to the business center and the field person have been largely ignored. This whole mess has been poorly handled by all concerned and should be addressed by the political base in Washington as their hands are not clean. tHIS COMPANY HAS A SERIOUS PUBLIC INVESTMENT AND SHOULD BEGIN TO ACT IN A RESPONSIBLE MANNER TO MAKE THINGS RIGHT WITH THE REJECTED DEALER BODY.

srt - Welcome to the forum. :)

You'll find there's a lot of agreement here that Chrysler has done a miserable job of assisting the OLDCO dealers with their cars, parts and tools. It's frustrating to watch Jim Press testify before Congress that 80% of the parts have been sold when he fails to disclose that they're being sold a deeply discounted prices.

I'm hopeful that a settlement for the OLDCO dealers will allow them to return their parts and tools. If not, my goal is to gather some media attention and "shame" Chrysler into doing the right thing.

[RickW]

Firstly...FYI...From what I read you left off the first part of the sentence which was "qualifying parts", and who knows what that means. I read about it originally from a blog on Sen. Kay B. Hutchinson's website. It's all about politcal posturing if you ask me.

I was one of the largest MOPAR wholesalers in the country. Since Chrysler wouldn't approve my warehouse without showing 5 years of control, I have a lease to try and get rid of...which forced me to liquidate over $700,000 of parts, and empty the building. There are a few companies that will sell your inventory for .40 cents on the dollar. The rest will sell for less. NOT ONE CALL OR HELP FROM CHRYSLER, and I called and e-mailed several times.

Not one person I spoke with from Chrysler knows anything about a parts buyback, and I wouldn't hold the parts on "hope". I can imagine what they say the average transactional price will be...and who's going to verify it?

[XDCX]

RickW - First post - Welcome to the Forum. :wave:

It seems there are very few dealers who know that Jim Press has committed to repurchasing parts - many of the DMs don't seem to know either.

That said, I doubt there are many OLDCO dealers who would trust Chrysler's "average transaction price" calculation. :mad:

I'm hopeful that Chrysler and GM will come up with a settlement in an effort to stop the current legislation. In your case, however, that may be too late - it sounds like you've already sold off most of your inventory.

[possum]

I still say, Chrysler is just dancing untill it doesn't even matter anymore. They need parts more than ever right now, and still no movement. After the pipeline fills again, they sure won't need them.

But, that tune can play both ways. On Finance Reserve payments they are wanting.....we have learned how to dance too.

[RickW]

I am unaware of Press's commitment to parts repurchasing. Was there a public announcement? I don't think anything he said while giving congress testimony counts for anything. I was in touch with Zone Parts manager, not DM...shouldn't he have known?

[XDCX]

I am unaware of Press's commitment to parts repurchasing. Was there a public announcement? I don't think anything he said while giving congress testimony counts for anything. I was in touch with Zone Parts manager, not DM...shouldn't he have known?

In a letter dated June 12, 2009 addressed to Senators Rockefeller and Hutchison, Press made the following statement: "We will continue to work with the discontinued dealers to redistribute their parts inventory for the next 90 days. After that time we will commit to repurchase remaining qualified parts inventory from those dealers at the average transaction price for all parts already redistributed."

Here's a link to the letter - click here (http://hutchison.senate.gov/resources/rockhutch.pdf)

While it's great that Press has committed to repurchasing parts, my bet is the "average transaction price" will amount to a windfall profit for Chrysler. :mad:

[srt]

Still waiting for the Mopar boys.Isure hope Washington wakes up on Chryslers actions which were morally wrong at the least.

[XDCX]

Still waiting for the Mopar boys.Isure hope Washington wakes up on Chryslers actions which were morally wrong at the least.

I was thinking about this over the weekend - Chrysler has ZERO incentive to help the OLDCO dealers to sell off their parts. It's in Chrysler's best interest to keep the liquidation price under 50 cents/dollar so they can use that value to conduct their repurchase.

[dodgequality]

Absolutely no action on parts or tools.
I did get a commitment on accessories - about $7000. worth - at 55% on the cost.
Since we are still open, we are selling our parts . At the rate we are going, this is much better than the 45 and 50 that was being bantered. No offer though got past the talking stage.
OLDCO / NEWCO could care less. Since they gave us our soft landing what do they care?
I do understand that the backorder situation is major.

[XDCX]

dodgequality - I'm happy to hear that you're selling off a lot of your parts to your retail customers. :)

Despite all the assurances from Jim Press, I think the vast majority of OLDCO dealers are still stuck with their parts. I never believed the statement that Chrysler found buyers for 80% of the OLDCO parts. :mad:

[ljbprrfmof]

What happens if an OLDCO dealer sells his parts to a wholesale user and there is a failure of that part? Without a current dated invoice from a NEWCO dealer, there is no MOPAR warranty.

So what does that make OLDCO dealer parts worth?

Maybe someone should point that out to Ms. Hutchinson.

Yeah, I can feel the love! :eek:

[XDCX]

What happens if an OLDCO dealer sells his parts to a wholesale user and there is a failure of that part? Without a current dated invoice from a NEWCO dealer, there is no MOPAR warranty.

So what does that make OLDCO dealer parts worth?

Maybe someone should point that out to Ms. Hutchinson.

Yeah, I can feel the love! :eek:

In my opinion, that's another reason why NADA and the OLDCO dealers should be fighting for an agreement by GM and Chrysler to repurchase parts and special tools.

Not only did Chrysler stick the OLDCO dealers with their parts, they won't have any warranty exposure on those parts once they're sold by the OLDCO dealers. In this case it's "win-win" for Chrysler and "lose-lose" for the OLDCO dealers. :mad: