What happened to Chrysler Financial?

[XDCX]

I still can't figure out why it was necessary or desirable to let CF die?

While I understand that CF has liquidity problems, so does GMAC. In fact, GMAC is a bigger mess than CF because of all their mortgage exposure.

Before Cerberus purchased Chrysler, CF was always part of Chrysler and contributed to their profits. Historically, CF has always been very profitable.

To the extent that the UAW is going to own 55% of Chrysler, you'd think the President's Task Force would want them to have a profit stream from their own captive finance company. I wonder if the Treasury was trying to force Cerberus to give up CF and the negotiations stalled?

There has to be more to this story - especially when you factor in the dispute CF had earlier this month when their TARP application was denied because of compensation issues.

[jdemonto]

Originally Posted by XDCX

I still can't figure out why it was necessary or desirable to let CF die?

While I understand that CF has liquidity problems, so does GMAC. In fact, GMAC is a bigger mess than CF because of all their mortgage exposure.

Before Cerberus purchased Chrysler, CF was always part of Chrysler and contributed to their profits. Historically, CF has always been very profitable.

To the extent that the UAW is going to own 55% of Chrysler, you'd think the President's Task Force would want them to have a profit stream from their own captive finance company. I wonder if the Treasury was trying to force Cerberus to give up CF and the negotiations stalled?

There has to be more to this story - especially when you factor in the dispute CF had earlier this month when their TARP application was denied because of compensation issues.

This should get interesting.......

Jason

[ssdd]

can any one who has had experience with both cfc and gmac give us a comparison?
sort of a "what we should expect" kind of deal?
maybe this needs to be posted in the main or gm area?

[Txflyer]

Originally Posted by ssdd

can any one who has had experience with both cfc and gmac give us a comparison?
sort of a "what we should expect" kind of deal?
maybe this needs to be posted in the main or gm area?

We currently deal with both. As with any financing source, they both go back and forth as to what they will buy at any given time. However, my experience is that GMAC isn't as bad as Chrysler was at returning contracts for stupid piddly things. Overall they seem much more consistant in their buying practices.

[possum]

The new Rate Sheet is out for CFC, along with all the new stipulations, and they probably won't be getting much to worry about.

[Granch]

Well, we can all save money on toilet paper now, my rate reduction coupons are goin in the bathroom...

[XDCX]

Originally Posted by ssdd

maybe this needs to be posted in the main or gm area?

Good idea - I'll start a new thread in the GM Finance Sections and ask for feedback.

[CL Pgh]

Originally Posted by XDCX

I still can't figure out why it was necessary or desirable to let CF die?

Well… here’s a possible/probably answer. With CFC employees getting the short end, here’s a couple recent conversations.

CFC has a package of “A” paper valued at over a billion… and they can’t find a buyer! They’re absolutely broke. Also, they have NO chance of obtaining Bank status and no additional TARP funds will be issued. On top of these pieces… Augusts conduit re-issue will be all but non-existent for CFC.

Considering CF current cash situation, credit rating for borrowing and near future inability to re-up its conduit loans… they’re as useless as ear-rings on a pig. GMAC offers all these things that CF cannot including a better outlook on future borrowing needs.

I'd still guess there's a couple other items we're unaware of... but that's enough for me to understand the "why" question.

[XDCX]

CL - Excellent points.

I agree there's no way the credit markets were going to renew the conduits in August. In hindsight, the fact that CF wasn't able to fully fund the conduit last year proved to be an indication of things to come.

Without beating a dead horse, I still have trouble with the fact that GMAC got bailed out but CF didn't. I agree that CF is broke and the market has no interest in extending credit, but the same could be said for GMAC before the Treasury stepped in and allowed them to become a bank holding company.

Concerning the people at CF, I'm guessing the President's announcement must have really blindsided them. A month ago I got the impression that some CF employees thought they would survive and Chrysler would be liquidated. It's amazing how fast things can change.

[dafuzz1956]

I had a small B-Day Party at my house Friday night and my CFC rep came, Talk about a pup with his tail between his legs, man. Any way we did the best to take his mind off and he had some free beer and pizza.
I spoke to him today and he is doing lot audits for the next 3 days. I really feel bad for the guy he just bought a house a couple of years ago when he moved up here and now his job is a big question now.

[jules4jeeps]

Poor guy, I really feel for some of my friends at CFC. I am not gonna call any of them and ask the obvious & difficult questions. I get enough of that from customers and family and I know how miserable it is to be asked those stupid types of questions.

"What now?" "What will you do?" "Did you see this coming?" "How did thing get so bad"
...

[XDCX]

Originally Posted by dafuzz1956

I really feel bad for the guy he just bought a house a couple of years ago when he moved up here and now his job is a big question now.

Sadly, there are a lot of people who are going to get hurt before this whole mess gets sorted out. There will be people who have given a fair portion of their lives to Chrysler that will be tossed out like yesterday's trash.

Originally Posted by jules4jeeps

Poor guy, I really feel for some of my friends at CFC. I am not gonna call any of them and ask the obvious & difficult questions. I get enough of that from customers and family and I know how miserable it is to be asked those stupid types of questions.

"What now?" "What will you do?" "Did you see this coming?" "How did thing get so bad"
...

That's an excellent example of empathy and compassion. Further proof that there are some great people in the car business.....

[zohpy]

Does anyone else think that with the demise of CFC and GMAC picking up the slack that we may be seeing a Chrysler/GM merger in our future?

[CarguyCO]

My thoughts exactly...........

[XDCX]

Originally Posted by zohpy

Does anyone else think that with the demise of CFC and GMAC picking up the slack that we may be seeing a Chrysler/GM merger in our future?

That's a good question. Based on what we've seen so far, anything is possible.

That said, I'd bet against a GM/Chrysler merger at this point. The Fiat deal has a lot of momentum and it would be an embarrassment to the President if the deal unwound. If the Task Force wanted a GM/Chrysler merger I don't think they would have allowed the Fiat deal get this far.

I get the feeling the demise of CF may ultimately be an effort by the Task Force to punish Cerberus. I have no evidence of this, it's just the impression I get and it's the only way I can make sense of the decision.

It reminds me of the President's decision to fire GM's Wagoner. Wagoner wasn't just fired, he was humiliated.