Chrysler said late Thursday that suppliers have begun asking it for cash on delivery for auto parts. In an interview with the Associated Press Chrysler’s Vice Chairman Tom LaSorda and Chief Financial Officer Ron Kolka said that suppliers have demanded COD but the company is trying to fend them off
When suppliers begin demanding COD from a company that is on the brink of bankruptcy, it can cause chaos in the company’s finances, reports Automotive News.
Chrysler said that cash will drop to $2.5 billion by the end of this year. That’s the bare minimum that Chrysler needs to make payroll and pay its suppliers. CFO Kolka said that the automaker pays its suppliers about $7 billion every 45 days.
“January, first quarter is a big problem for us,” Kolka said.