ChryCo Bailout Supported Discounts Exposed!

ChryCo Bailout Supported Discounts Exposed!
http://tinyurl.com/dnzcj9

I know, huh? Anyone who spent five minutes thinking about Motown’s $42.4
billion (and counting) feast at the federal bailout buffet would figure
out that the beneficiaries are using tax money to discount their
products—to support an unsustainable small market share. OK, that last
bit’s a bit technical. But the bailout = discount = unfairness media
meme is just gaining traction in the MSM. And it’s no small point. As
I’ve pointed out here before, those federally-sponsored new car
discounts effectively punish automakers who didn’t run their companies
into the ground and threaten their products, profits and jobs. The
Detroit News wakes-up to the story this morning. Chrysler, you are the
weakest link.

You can get a $31,405 Dodge Ram pickup for $17,975 in Denver, much
to the delight of Chrysler dealers who are using some significant
incentives to get people into showrooms. Chrysler LLC is spending big —
to the tune of more than $5,600 on average per vehicle in incentives —
to reverse its fortunes after months of dramatic sales drops. But the
sales strategy is raising some eyebrows as the Auburn Hills automaker
has received $4 billion in federal aid and is presenting a case for more
help leading up to the March 31 deadline to show its operations are
sustainable and its loans can be repaid.

To her credit, DetN scribe Alisa Priddle lays out—though doesn’t
highlight—GM’s participation in this Madoff-like scam.

In February, Chrysler spent an average of $5,608 per vehicle on
incentives, according to Edmunds.com. That compares with $3,681 from
General Motors Corp.; $3,384 at Ford Motor Co.; $2,572 at Nissan Motor
Co.; $1,682 at Toyota Motor Corp.; and $1,249 from Honda Motor Co.

Chrysler’s defense: the discounts were planned a long time ago, and it’s
different money. But hey, if that is horseshit, who cares?

Using federal money to stimulate demand is a “way of priming the
pump,” said Sheldon Sandler, chief executive officer of Bel Air Partners
in Skillman, N.J., which provides financial services to dealers. “It may
be unfair, but I’d rather see them use cash to support incentives and
make cars affordable than use the cash to support legacy costs that
won’t stimulate demand.”

“It’s better to sell cars and lose a little money than have them
sit on the lot and not make any,” Sandler said. That’s because it is
inventory that the dealer has already paid for.

Welcome to Bailout Nation, where automakers use your tax money to sell a
car people wouldn’t otherwise buy at a discount—after taking their cut.