About Chrysler

FAQ - Dealers
General Questions

Q1: What does this new company mean to me as a Chrysler, Dodge or Jeep customer ?
A1: The partnership with Fiat transforms Chrysler into a vibrant new company with many strategic advantages. It enables Chrysler to better serve its customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Chrysler and its dealers will continue to sell and service vehicles and honor warranties without interruption. Consumers can continue to purchase our vehicles with complete confidence.

Q2: What is the ownership structure of the new company?
A2: When the transaction is completed, the Voluntary Employee Beneficiary Association (VEBA) will own 55 percent of the new company and the U.S. and Canadian governments will own proportionate shares of a 10 percent stake. Fiat will initially own a 20 percent stake in Chrysler. Fiat will have the right to increase its ownership stake an additional 15 percent in three increments as it meets the following criteria: 5 percent for bringing a 40 mpg vehicle platform to Chrysler to be produced in the U.S.; 5 percent for providing a fuel-efficient engine family to be produced in the U.S. for use in Chrysl er vehicles; and 5 percent for providing Chrysler access to its vast global distribution network to facilitate the export of Chrysler vehicles. Fiat cannot become a majority owner until all U.S. government loans have been completely repaid.

Q3 What is a Chapter 11, section 363 bankruptcy?
A3: For the past several months, we have worked tirelessly to reach agreement with key stakeholders on concessions that would allow Chrysler to complete this alliance with Fiat and proceed with its plans without the need for a bankruptcy proceeding. Despite substantial progress on many fronts, Chrysler was not able to obtain the necessary concessions from all of its lenders. As a result, under the direction of the U.S. Treasury, Chrysler LLC and 24 of its wholly owned U.S. subsidiaries filed voluntary petitions under Chapter 11 of the U. S. Bankruptcy Code. With this filing, we will also submit a motion under Section 363 of the Bankruptcy Code, requesting the swift approval by the Court of the agreement with Fiat and the sale of Chrysler’s principal assets to the new company. The benefit of this type of filing is speed. It should allow a leaner new company to emerge in a matter of 30 to 60 days, well positioned for long-term viability. Chrysler’s Mexican, Canadian and other International operations are not part of any bankruptcy filing.

Q4: Is Chrysler still an American car company?
A4: Chrysler’s operations, as now, will remain primarily based in the U.S., employ tens of thousands of Americans directly and at the supplier and dealer level, and will continue a proud tradition of American engineering and manufacturing into the future.

U. S. Dealer (Please note: These apply only to U.S. dealers, the 363 Reorganization filing is relevant to U.S. dealers only):

Q5: Will the resale value of customer’s vehicles decrease because of the bankruptcy filing?
A5: Resale values are determined by actual transactions in the used car markets, Independent third parties forecast values.

Q6: How will the reorganization affect the availability of service and replacement parts at U.S. dealerships?
A6: At this time we do not anticipate any issue with the availability of service and replacement parts.

Q7: Will there be a difference in the time it takes a dealer to get paid for incentives?
A7: We have no plans to change the timing or the process of how dealers are paid for incentives due to them.

Q8: Will Chrysler still offer consumers incentives on new vehicle purchases that are commensurate with what is going on in the market place?
A8: Yes. The current Employee Pricing Plus Plus program has been extended through May 4, 2009. Chrysler traditionally announces incentives as part of its monthly sales release and call. We will continue to do that, announcing new incentives the week of May 4.

Q9: How will U.S. dealers get paid for warranty work?
A9: Our priority is to do what is right for our customers. Dealers will continue to get paid for warranty work, there is no plan to change that process.

Q10: How will the bankruptcy filing effect existing CJD vehicle warranties?
A10: There is no change to existing warranties. All warranties will continue to be in effect and honored.

Q11: How does the bankruptcy filing affect the warranty if a customer purchases a new vehicle tomorrow?
A11: There will be no effect on the warranty of a new vehicle purchased during the reorganization. The warranty will remain valid for the duration of the warranty period. The warranty is guaranteed by the U.S. government if the vehicle is/was purchased from March 30, 2009 to June 30, 2009. In addition, a possibility exists for a renewal or extension based on mutual agreement.

Q12: How does the bankruptcy filing affect the U.S. government backing of Chrysler vehicle warranties?
A12: There will be no effect on the warranty of a new vehicle purchased during the reorganization. The warranty will remain valid for the duration of the warranty period. The warranty is guaranteed by the U.S. government if the vehicle is/was purchased from March 30, 2009 to June 30, 2009. In addition, a possibility exists for a renewal or extension based on mutual agreement.

Q13: What vehicle warranties are backed by the U.S. government? (Any Chrysler, Jeep or Dodge with a valid warranty, or only vehicles purchased after the announcement of the government backing?)
A13: As initially announced, the U.S. government said it would back the warranties for customers who purchase a new Chrysler, Jeep or Dodge vehicle from March 30, 2009 to June 30, 2009, but the possibility exists for a renewal or extension based on mutual agreement.

Q14: Will the timeframe for reimbursement for warranty work change during the reorganization process?
A14: We have no plans to change the process or timeframe for reimbursements for warranty work.

Q15: How will the bankruptcy filing effect payments to dealers from Chrysler?
A15: Our plan is it will have no effect on eligible payments to dealers. We have applied for permission from the court to pay virtually all of our dealers factory receivables.

Q16: Will Mopar continue to exist?
A16: Mopar is, and will continue to be, a valuable part of the Chrysler company business.

Q17: Will parts for older Chrysler (Mopar) vehicles continue to be available for purchase through a local dealer and for how long?
A17: Yes, they will continue to be available and the process for how long authorized service and replacement parts are available will not change during the reorganization.

Q18: How will dealers get paid for service contract work?
A18: We plan no changes to the process for how dealers are paid under the terms of the service contract.

Q19: Will dealers be closed as part of the bankruptcy filing, if so, when will a dealer know?
A19: It is too early in the process to comment, when we have information we can share, we will communicate that information directly to our dealers.