Chrysler Corporation: balancing global expansion and international risk

The treasury group at Chrysler Corp. that supports the company's rapid global expansion - Corporate Credit's International Sales Finance department - has implemented a way to mitigate the commercial and political risks associated with the company's worldwide growth. All the previous p...

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Bibliographic Details
Published in:Business credit 1997-11, Vol.99 (10), p.25
Main Authors: Herbst, Jr., Frederick C, Trebing, David M
Format: Magazinearticle
Language:English
Subjects:
Automobile industry
Automobiles
Case studies
Credit departments
Credit policy
Customers
Export credit insurance
Financial performance
Funding
Globalization
Insurance coverage
Interest rates
International finance
Management
Methods
Money markets
Political risk
Receivables
Risk management
Sales
Shipments
Third party
Vehicles
Working capital
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Summary:The treasury group at Chrysler Corp. that supports the company's rapid global expansion - Corporate Credit's International Sales Finance department - has implemented a way to mitigate the commercial and political risks associated with the company's worldwide growth. All the previous payment arrangements with international distributors presented shortcomings to both Chrysler and its distributors. So, ISF developed a solution - an innovative risk management and wholesale financing plan supported by export credit insurance. There are 2 key strategic elements to ISF's program - credit insurance and factory-direct financing. For Chrysler, the primary benefit is that risk is reduced while liquidity is simultaneously improved; the company has the ability to receive payment immediately through an off-balance sheet securitization of its receivables.
ISSN:0897-0181