Monday, December 22, 2008

Is Chrysler iliquid

Most people think they are.
Do most people realize that the car industry in the States recognizes revenue on Car sales for the manufacturers when the car is shipped to the distributor. Strange how in the early 2000's in the computer industry and other industries this was called stuffing the channel. Amazing how a few of the right lobbyists and appropriate donations can get GAAP accounting changed for the car industry. When I saw Cerberus buy Chrysler I wondered (as I have worked with Cerberus) what gap in GAAP had they found in the car industry. Cerberus only focus on cash flow, so immediately they cut car models, shuttered plants and focused on cash not revenue. Novel concept? No this is where the focus for the USA will be in the future. I for one will be eager to watch Chrysler's progress.

Aivars Lode

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