Bloomberg reports American Suzuki is set to borrow up to $45 million to to close its automotive dealerships and freshen up its it motorcycle and marine business. Suzuki Motor Corporation will loan American Suzuki the funds at three percent below the London Interbank offered rate in order to offer dealer owners a cash payment in exchange for voluntarily abandoning franchise agreements. The company's 216 dealers have 10 days to make a decision on the matter. Under the plan, Suzuki would give dealer owners half of what they're owed in one lump sum, and the dealers would then be able to pursue the remaining debt through the company's bankruptcy procedure.

U.S. Bankruptcy Judge Scott C. Clarkson granted American Suzuki interim authority to borrow the funds, but Bloomberg reports the company will likely return to court in a few weeks to seek up to $100 million. According to Richard Pachulski, a lawyer for Suzuki America, the automaker may owe its dealers somewhere around $50 million.


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  • 36 Comments
      clquake
      • 2 Years Ago
      3% below libor, awesome. Negative interest. Means the lender pays you. And it's definitely an Autoblog mistake since the original article says 3 percent above libor.
      breakfastburrito
      • 2 Years Ago
      Suzuki had the swift sport, but refused to bring it to the U.S. Big mistake. Instead they sold mini SUV's and a Jetta clone... Goodbye Suzuki. Your management SUCKED!
      luigi.tony
      • 2 Years Ago
      I blame the GM kiss of death. Look what GM did to SAAB. Look what GM did to Isuzu. Suzuki didn't get away from GM in time to be saved.
        DyanRucar
        • 2 Years Ago
        @luigi.tony
        Subaru fared well, but getting in bed with Toyota adverted any demise
        imoore
        • 2 Years Ago
        @luigi.tony
        Bull crap. Saab was already damaged before GM bought it. It could never be fixed. Isuzu decided the US market was not as important as the rest of the world, so it decided to rebadge GM products to sell in the US. GM did not force them to do this. Same with Suzuki. GM offered them financial assistance, but Suzuki declined. And no one forced them to sell rebadged Daewoos, either. Suzuki's misfortune was its own doing, just like that stupid decision to hook up with VW. We know how well that worked out. It's easy to blame GM for these guys' problems. But not this time. You lose, pal.
          GR
          • 2 Years Ago
          @imoore
          No, I would argue that GM's management is partly responsible, but not entirely. Suzuki's decline really started when GM had their failed Daewoo partner re-import cars, but this time labeled as Suzukis. Suzuki is also to blame for letting GM do this just to get brand recognition. Unfortunately, and ironically, it led to brand infamy. The Daewoos were crap and it ruined Suzuki's fragile image. They then got largely ignored by the market and consumers even after Suzuki parted ways with GM and only had real Made in Japan Suzukis to sell (other than the Equator which was a Nissan Frontier; a good truck). By then, the damage was done and Suzuki was in oblivion. It led to this bankruptcy. GM also has a history of doing this kind of thing to its foreign and also its other US brands. GM's management is run by people who are business people, not car people. They are the kind of folks who would sell copiers one day and then move to selling cars just to move up the corporate ladder. Corporate management folks to the core. They don't really understand cars, auto-branding, auto consumers, nor have the passion for it. For them it's about profit, whether selling cars, planes, medical equipment, or even potatoes. Meanwhile as GM ruined foreign brands, GM enjoyed Japanese reliability by having Suzukis and Toyotas labeled as GM products via Chevy or Geo. Recall the Geo/Chevy Tracker, Geo Prism, Geo Metro? Toyota was smart enough to have a short relationship with GM as it was mostly for import deregulation purposes. Interestingly, GM is still at it with these Daewoos. The Cruze, Spark, and Sonic are all Daewoos. They have fooled a lot of Americans to thinking otherwise with production in the US, but a quick wiki search will reveal that all three cars were engineered and developed by Daewoo of Korea. The Cruze and Sonic are made in the US, but they are just rebadged Daewoos. Now Chevy is the lab specimen that GM gets to poke and prod. Oh, and the Cruze has awful reliability. Go figure, it's just a new Daewoo. Suzuki knew it was pointless to remain in the US with its tarnished and then irrelevant reputation. They decided to throw in the towel and focus on their markets where they are strong. Suzuki is to blame for their failure in the US, but given that GM pulled a lot of the strings of American Suzuki, you can't deny GM was part of the failure too.
        jdbandicoot
        • 2 Years Ago
        @luigi.tony
        I hate what GM did to Pontiac. Made them the ugliest cars, gave them cheap, unreliable parts. Totally screwed a great car. I agree with ya Toney.
      luigi.tony
      • 2 Years Ago
      welcome to Oamanation
      MotorworldHype
      • 2 Years Ago
      God this just gets more and more sad. Suzuki does not make bad cars, they just lacked the marketing dollars to communciate that correctly. If Penske still wants to save a car company I think these guys would make a good canidate.
        Travis C. Vasconcelo
        • 2 Years Ago
        @MotorworldHype
        What a perfect company for Penske to champion the cause for. Great comment! I hope others pay attention here...specially Roger Penske!
      Ron
      • 2 Years Ago
      And you dumb azzes voted for Obama?
        David
        • 2 Years Ago
        @Ron
        And you voted for who???? Who's the dumb azz now Bub Bub???? Get a life and put your big boy pants on!
      GreenN_Gold
      • 2 Years Ago
      That would be 3% *above* LIBOR. 3% below would be negative.
      • 2 Years Ago
      [blocked]
        GR
        • 2 Years Ago
        Not sure why people hate the Kizashi name so much. I own one and love it. It's about damn time a Japanese car has a Japanese name. It's not that hard to pronounce. Key-Zah-She. I think Subaru is harder to pronounce and most non-Japanese actually mispronounce the name. It's not Soo-ber-roo, but more Su-Bah-ru. The Su and the Ru sound should be short, not long as most Americans pronounce it. I speak Japanese so I would know. Also, the other Suzuki with a Japanese name was rather successful: The Hayabusa. A Suzuki engineer came up with the name while watching a peregrine falcon. Hayabusa is the Japanese name for the peregrine falcon which is the fastest traveling animal on Earth. In a dive, it can reach speeds of around 194mph, which was similar to the motorcycle's top speed. Coincidence? I think not. The 'Busa did rather well and the name did not deter buyers. In fact, the bike comes with the kanji (or Japanese-adapted Chinese character) of "Hayabusa" as a large decal. I think the name was a marketing success. Kizashi also has a meaning: it means "a sign of things to come" or omen, harbinger. The name was chosen to show Suzuki's direction to more upscale cars than their small, econo-boxes they are world famous for. While the car and company failed in the US, Suzuki is actually largely successful in Asia. Youtube videos seem to show that Suzukis are also popular in Russia. The Kizashi is also a global car made for world-wide markets. I agree with the marketing argument in that it was hardly marketed at all. It's like Suzuki of America had no idea what they were doing and Suzuki Corp of Japan were apathetic about it. It's unfortunate as the Kizashi is a rather good car.
          Ericloz
          • 2 Years Ago
          @GR
          That comes with not knowing your market or culture...the name may be a success in Japan; however it will not and did not do so well in the US. People do not typically buy something they have to take lessons to learn how to pronounce.
          GR
          • 2 Years Ago
          @GR
          dej, The Japanese have a rather hard time pronouncing the "L" sound. This is because the L sound is not found in the Japanese language. That's why salary-man is pronounced sarari-man, baseball as basebaru. As you can imagine, they have a hard time with lollipop. I would like to know what the American excuse for mispronouncing Subaru is. It's not even a person's last name like Honda, Suzuki, Toyota (derived from Toyoda), etc. Subaru is the name for Pleiades star cluster in the Taurus constellation. Su-Bah-Ru. Not-that-hard. Ericloz, The Kizashi is a global car, not some made-for-the-USA model. It's also not that hard to pronounce if you try. In fact, nearly all Japanese companies have Japanese names. Is Suzuki harder to pronounce than Kizashi? Break it up into syllables, kind of like haiku (hmm, also Japanese). It's not hard. Kizashi is just Key-Zah-She.
      snakedoctor
      • 2 Years Ago
      That's too bad. I have owned two Suzuki Side-Kicks and they have been great. No mechanical problems at all and in snow country, nothing better and really good 4 wheel drive. This is sad...
      christophermcg
      • 2 Years Ago
      That's too bad. the Kizashi was a nice sedan with a bad name and no advertising.
      Teleny411
      • 2 Years Ago
      Suzuki and Mitsu should have forgot their Japanese market competition and teamed up. They might have made it that way...
      Matthew Heidenreich
      • 2 Years Ago
      when's the last time you said, "man, I really want that Suzuki." Didn't think so. They should stick to motorcycles
        GR
        • 2 Years Ago
        @Matthew Heidenreich
        "man, I really want that Suzuki." I actually think that way all the time. If you wanted an affordable real 4x4, Suzuki was the answer. Jeeps are good, but rather pricey. Not even the Wrangler is that cheap, especially for all the compromises you have to make to own one for offroad prowess. The Grand Vitara and Jimny were cheaper yet pretty stellar off-roaders, even if not Jeep level. The SX4 was also the most affordable AWD in the US. Most owners love it. The Kizashi was also a hidden gem, offering a lot in such an over-crowded boring segment. I've owned two Suzukis and have been very satisfied. I also really want the two Zukes the rest of the world gets but not Americans: the Swift and the Jimny (new Samurai). I spend a lot of last night watching youtube videos of the Jimny offroad. I really really want one.
        snakedoctor
        • 2 Years Ago
        @Matthew Heidenreich
        Hey Matt, in 1994, I bought my first Suzuki SideKick SUV. It had 4 wheel drive and at the time, one of only two SUV's, in the market place, with independent coil suspension on all 4 wheels. The other? Range Rover. Everything else, had rear leaf springs. I have owned two and they have both been great. Cheers....
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