American Suzuki Needs Loan to Limp from US Market
American Suzuki ended its North American car selling operation earlier this week, but that left a crowd of unhappy dealers the company is now trying to pay off.
Suzuki will continue to sell its motorcycles and boats through separate dealerships, but is offering its car dealers cash payments within 10 days if they tear up their franchise agreements voluntarily. Parent company Suzuki will offer the loan, which won interim court approval, at a below market rate.
It’s part of a plan by Suzuki to avoid long legal battles with its 216 dealers, but things might not be so simple. That’s because various state laws protect dealers from being forced to shut down by their manufacturers. If they decide to shut down without a fight, Suzuki will pay them half of what they are owed by the distributor within the 10-day period.
The $45 million figure is only the beginning. American Suzuki will return to court in the coming weeks seeking approval to borrow as much as $100 million.
[Source: Bloomberg]
Luke is an energetic automotive journalist who spends his time covering industry news and crawling the internet for the latest breaking story. When he isn't in the office, Luke can be found obsessively browsing used car listings, drinking scotch at his favorite bar and dreaming of what to drive next, though the list grows a lot faster than his bank account. He's always on <A title="@lukevandezande on Twitter" href="http://twitter.com/lukevandezande">Twitter</A> looking for a good car conversation. Find Luke on <A title="@lukevandezande on Twitter" href="http://twitter.com/lukevandezande">Twitter</A> and <A title="Luke on Google+" href="http://plus.google.com/112531385961538774338?rel=author">Google+</A>.
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Iown a Suzuki Kizashi andlove itbut Suzuki is a Japanese company not AMERICAN an not to be bailed out by us. Why doesn't the Japanese government bail them out and loan them money like we did to save GM an Chrysler.