Wish I Had a Marker Like That: Chrysler Taps $2 Billion Credit Line

Chrysler Taps $2 Billion Credit Line

"Chrysler LLC, facing liquidity pressures amid a steep decline in the U.S. automotive market and rising commodity costs, tapped a $2 billion credit line made available as part of its sale last year from Daimler AG to Cerberus Capital Management LP."

On the heels of my post about the rising cost of credit-default swaps, here is news that Chrysler is exercising its right to tap into a $2 billion dollar credit line. Could a "free gas forever" plan be in the works ;-) All kidding aside, we don't know exactly what Chrysler will be using the cash for. Certainly being heavily loaded with unpopular trucks hasn't helped the Pentastar brand. Because Chrysler is privately held, they really don't have to tip their hand nearly as much as Ford or GM.
I would hope that a large portion of any funds used would be to restructure and reinvigorate Chrysler's lineup. I am a bit worried about the departure of Mike Donoughe from Chrysler's uber important "Project D." Rumors have swirled that Donoughe split after a rift with management over the direction/pacing/funding of the project. One engineer was overheard to have said that Project D was like "banging your head against a wall" because management was asking for too much with too little. Keep in mind that all of that is hearsay and cannot be attributed to any one person. I just hope that Chrysler is willing and able to commit the necessary funds to products that can help in its turnaround. Wisely spent, $2 billion can have a great impact. If Chrysler does elect to fully draw down that credit line, let's hope that there will be something to show for it at the end of the day.