Chrysler may cut more dealers in credit crunch

Chrysler Group may have to cut another 145 dealers unless they can find a new source of financing. That’s because the dealers have been unable to qualify for financing from GMAC, Chrysler’s primary financing source.

The dealers have been caught in the in the transition from Chrysler Financial to GMAC. They have existing mortgages and floorplan debts through Chrysler Financial which refuses to give up its rights to first call on assets. In addition, much of the mortgaged real estate is now worth less than the mortgages. Chrysler Financial is no longer offering floorplan financing for Chrysler products.

Dealers had until the middle of this month to qualify for GMAC funding or obtain ongoing financing from another source.