Chrysler’s Chief Financial Officer, Ron Kolka, told The Associated Press that the company could face another shortage in cash in July as it shuts down factories for two weeks to change from one model year to the next. How? Automakers book revenue for a vehicle once it leaves the factory and heads over to a dealership. When a car company isn’t producing any cars during a shutdown – it stops generating revenue.
Kolka didn’t tell the publication what Chrysler plans on doing if it doesn’t get further government aid. He said that the $4 billion Chrysler received in January was planned to last through March 31. The company is now seeking an additional $5 billion.
Kolka said that Chrysler planned conservatively so the company can be viable at the current industry annual sales rate of 9.1 million vehicles in the United States.
– By: Omar Rana
Source: Detroit Press