With Chrysler's cash dropping to $2.5 billion as we race to the end of the month, suppliers to the automaker have begun asking for immediate payment for delivered parts. When suppliers demand COD from struggling companies such as Chrysler LLC instead of extending payment terms, it wreaks havoc with the company's financial structure. Chief Financial Officer Ron Kolka and Vice Chairman Tom LaSorda told the Associated Press that the company is "fending them off." In order to work out a viable agreement, the company has scheduled meetings with the suppliers today.

Although $2.5 billion sounds like a nice chunk of change, it's the bare minimum the automaker needs to make payroll and pay suppliers (as of now, Chrysler pays $7 billion to suppliers every 45 days). With the failure of the bailout last night in the Senate, Chrysler is in dire straits – without an immediate cash infusion the company could run out of funds by the end of the month.

[Source: Automotive News, subs. req'd]


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