Chrysler Financial has a strong history and the company is one of the most stable American manufacturers. However, it is unfortunate that recent reports have focused on the troubled automotive division. In January, General Motors recalled its line of Chevrolet Volt and Chrysler Pacific sleeper trucks due to a battery problem. The recalls resulted in the loss of thousands of potential sales. Since then, financial analysts and stockholders have been concerned about the financial health of this auto maker.
As is often the case, a company’s stock price is affected by the state of its balance sheet. One key area that concerns analysts is its accounts receivable facility. This part of the company’s revenue stream is responsible for collecting payments from customers for vehicles that are in the process of being purchased as well as selling vehicles no longer under warranty. As is usually the case, a company with a large inventory of merchandise will experience a net positive cash flow from its receivables. It can only be expected, however, if the accounts receivable facility of a large auto maker is able to generate a profit.
The financial troubles at Chrysler caused it to reduce its full-time workforce by almost 30 percent. The reduction in staff left the company with very few customer service representatives to handle calls and questions. Sales in the new year were actually lower than for the same period last year. A primary cause of this problem has been the loss of market share in markets such as the Southeast. Consumers in these markets have tended to buy cars from manufacturers that provide quality products at affordable prices.