Chrysler Faces July Cash Crunch Even With More Aid

United Auto Workers members leave the first shift at Chrysler's Warren Truck Assembly in Warren,...

United Auto Workers members leave the first shift at Chrysler's Warren Truck Assembly in Warren, Mich., Monday, March 9, 2009. Members of the Obama administration's auto task force visited the plant that builds the Dodge Ram truck. (AP Photo/Carlos Osorio)

(AP)

Even if Chrysler LLC gets additional government loans, it could face another cash shortage in July when revenue dries up as the company shuts down its factories for two weeks to change from one model year to the next, its chief financial officer said.

CFO Ron Kolka, in a brief telephone interview with The Associated Press, said the company planned for the $4 billion it received Jan. 2 to last through March 31. The company is talking with the Obama administration's autos task force about getting another $5 billion, and faces a March 31 deadline to complete its plan to show how it can become viable and repay the loans.

Kolka wouldn't say what would happen if the company doesn't get further government aid, saying only that he's not planning to run out of money.

Chrysler's viability plan submitted to the Treasury Department on Feb. 17, he said, calls for the additional government aid.

"Following that, the next critical low point in cash is July shutdown," he said Friday.

Automakers generally book revenue from a vehicle once it leaves the factory and heads for a dealership. But when it doesn't produce cars during the shutdown, the revenue stops flowing.

Kolka said Chrysler planned conservatively so the company can be viable even at the current U.S. industry annual sales rate of 9.1 million vehicles, the lowest level in 27 years.

Executives with Chrysler and General Motors Corp., which also is using government loans to stay out of Chapter 11 bankruptcy protection, met with the government task force on Monday in Detroit, visiting GM's tech center and a Chrysler pickup truck factory in the Detroit suburb of Warren.

The members, led by Wall Street financier Steven Rattner and Steelworkers union official Ron Bloom, asked probing questions of Chrysler executives, but didn't express doubts about the company's plans, Kolka said.

"They were not negative and they were not critical," he said. "They were asking the right questions."