December 9, 2009

Chrysler restores discounted leases for retirees

By GREG GARDNER
FREE PRESS BUSINESS WRITER

Chrysler Group LLC is restoring a discount lease program for about 26,000 salaried retirees and surviving spouses that was discontinued last February for employees and retirees.

The program for current employees reopened in October, but those leases are for 24 months.
 

Now, white-collar retirees will be able to lease two 2010 model Chrysler, Jeep, Dodge or Ram vehicles for 36 months between Dec. 9 and June 30, 2010.
 

GMAC, which is Chrysler’s largest wholesale and retail finance company, will offer the leases.
 

“All of us at Chrysler appreciate the many years of service you provided,” the company said in a letter signed by Nancy Rae, executive vice president of human resources, and Peter Grady, vice president for network development & fleet.
 

The decision came after a recent meeting between Grady and retirees.
 

“We are very pleased. We used every means possible to ask them to reconsider,” said Chuck Austin, president of the National Chrysler Retiree Organization.
 

Employee and retiree discounts historically have been a big selling factor in southeastern Michigan, where there is a high concentration of both. As industry sales weakened , automakers expanded the discounts to non-employees, but lost money when the vehicles came to their end of their leases worth less than the residual, or resale, value automakers used to establish the monthly payments.
 

In order to conserve cash, Chrysler stopped leasing to the public in August 2008, then halted the employee and retiree deals in February as it conserved cash any way it could before filing for Chapter 11 bankruptcy protection on April 30. Chrysler exited bankruptcy on June 10 under the control of Italy’s Fiat.
 

On average, the retirees who are leasing over three years, will pay about $100 a month less than current employees who are leasing for two years.
 

While the lessees pay insurance, tax, title and registration fees, no down payment is required and oil changes and scheduled maintenance are covered at intervals of 3,000 and 6,000 miles, respectively.