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03 September 2009 

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Is Chrysler Collapsing
 

President Bush has announced a $17 billion bailout for America's ailing carmakers to stave off a possible collapse of the auto industry.  Among the recipients is Chrysler, which has been making cars since 1925.  The company has said it does not have enough cash to continue operations through the end of this year.  

The Bush bailout comes just in time; Chrysler has extended its annual shutdown of production plants by two weeks, prompting fears it was heading towards bankruptcy.  How is the economic upheaval affecting Chrysler car dealerships? VOA's Kay Maddux and Nico Colombant went to investigate.

 
 


David Hellmuth, the general manager at Passport Chrysler in northern Virginia, says his dealership has been struggling since early 2008. Hellmuth says sales are down 70 percent this year.  He used the word "deflation" (a negative inflation rate which lessens the value of money) to explain what is happening. 

David Hellmuth, General Manager at Passport Chrysler, says sales are down 70 percent this year
David Hellmuth, General Manager at Passport Chrysler, says sales are down 70 percent this year
"We are selling vans now for less than we were selling minivans probably in 1997," he said, "because the economy is not as good as it was.  So we have really had, I can't swear by this, deflation with a number of our cars."

A salesman, who used his first name Sid, said he is able to sell some used cars with customers and a few new sport utility vehicle Jeeps, but little else.  Sid said he's never seen it as bad as this in the 25 years he has been selling cars.  When we asked him what it would mean if Chrysler, General Motors and Ford went under, he added, "It would be an institution going down.  I mean the two major industries are housing and automobile. I don't think it will ever get to that. Hopefully, it will work out."

An office inside the dealership is filled with memorabilia and pictures of happier days, with customers smiling on the lot having just purchased a Chrysler. 

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