Sworn affidavits show the depth of problems Chrysler faces in the future
14 May 2009

Court papers have revealed the depth and complexity of the problems facing Chrysler when it comes out of bankruptcy protection and returns to making cars.

The sworn affidavits, seen by the CNN news agency, reveal the depth of the problems Chrysler faces.

For instance, Chrysler pays its suppliers 45 days after delivery. As a result of the current shutdown, which will last 60 days at least, many suppliers face going without payments and potential bankruptcy. This supply chain must be rebuilt once Chrysler resumes building cars.

According to leading engineer Frank Ewasyshyn, resuming suspended work on new models will be harder to do because of the suspension. "We lose some of the learning and expertise," he said, adding that development will take one-and-a-half times longer than work done before the shutdown.

Ewasyshyn adds that idling the factories is still expensive. "Paint should be removed and stored after 21 days at a cost of $2 million (£1.3 million)," he said. "After 69 days, paint would need to be replaced at a cost of $15 million (£9.9 million)."

It has also been revealed that 286,687 2009 cars - more than three months supply - were unsold on dealer lots at the time of Chrysler filing for bankruptcy protection.

Chrysler vice-chairman Tom LaSorda also told the court that he had spent two-and-a-half years trying to find a partner for Chrysler. Companies he ahd approached include GAZ, GM, Honda, Hyundai, Magna, Nissan, Tata, Toyota, VW and several Chinese car makers.

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