Chrysler Financial to Close by 2011

The US Treasury Department is hard at work in cleaning up the financial mess left behind by the crashing automotive industry in these past few months. The effects of the crisis have not only affected the manufacturer's themselves, but their financial arms as well.

In an announcement made yesterday, the Treasury said it will close Chrysler Financial by the end of 2011, in an "orderly fashion". The move will cause the loss of several hundred jobs in Detroit and its surroundings, DetNews reported.

"Chrysler Financial is currently following Treasury's directive to liquidate its business in an orderly fashion," Kenneth Feinberg, the man put in charge by the Treasury Department to oversee pay for top executives at the seven firms that received government bailout money. "Accordingly, Chrysler Financial is currently pursuing a successful wind down of its operations by Dec. 31, 2011."

"Treasury recognizes that Chrysler Financial is continuing to operate in the normal course of business while acknowledging that the origination of new retail and wholesale lending for Chrysler Group LLC is being handled primarily by GMAC. Treasury also notes that Chrysler Financial will continue to service its obligations to its existing lenders as required by its outstanding loan agreements," Meg Reilly, Treasury spokeswoman told the source.

The announcement took Cerberus Capital Management, the owner of Chrysler Financial, by surprise. According to its officials, Cerberus had no idea any liquidation orders have been issued.

Chrysler, the automaker, did not respond to the announcement, made as part of the Treasury's new executive pay rules issued yesterday.