The big 3 are currently in a deep automotive crisis and their own liquidity is on the verge of zero.
This is a big problem, not only because of the dependency on external money funds to increase the ongoing business, but also because a possible loss of liquidity, only the idea distracts any customer.
First of all, by cutting of workforce, the big 3 are loosing most of their own vehicle customers, which consist to a large part of their own employees.
Further any other customer will think twice. Would you buy a car if you know that after purchase perhapse you wont have any warrany or spare parts for your vehicle left?
So any warranty promise is vaud if the company goes into bankrupcy or is not even able to pay any open warranty obligations.
Please take a look below, here we can find an estimation on the cash burning rate per quarter in relationship to the available on hands liquidity.
So as we can see it seems that, Chrysler has liquidity for 2 quarters (6 months), GM for around 3 quarters (8-9 months ) and Ford is estimated to also around 3 quarters. (8-9 months).
Lets hope that the estimations are not valid.
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