From a court case, here is an interesting read on the relationship of Chrysler Corporation (the defendant) and a dealership (the plaintiff) around 1975. It starts off somewhat dry, the exciting part comes later on:
"Since 1965, the purchase of new vehicles from Chrysler was financed, or "floor planned," through Chrysler Credit Corporation [hereinafter Chrysler Credit], a subsidiary of defendant. By virtue of a power of attorney given by plaintiff, Chrysler Credit Corporation would automatically pay defendant on behalf of plaintiff for all new vehicles, and would then place the vehicles on plaintiff's floor plan line of credit, unless for one or more reasons the line of credit was suspended or withdrawn. When a vehicle placed on plaintiff's floor plan of credit was sold to a customer, plaintiff was obligated to pay Chrysler Credit for the wholesale charges. Chrysler Credit billed the dealership monthly for wholesale finance charges.
In 1974, Mr. Kirby's dealership sold 168 new vehicles and earned a profit of $24,129.27. The following year, however, plaintiff's sales fell to 88 new vehicles, and the dealership recorded a loss of $11,440.00. In February 1976, Chrysler Credit placed the dealership on financial hold, a procedure where Chrysler Credit stopped the funding of purchases of new vehicles from Chrysler, because Mr. Kirby had sold seven vehicles to retail customers without repaying Chrysler Credit for the wholesale price of the vehicles. This was known as being "out-of-trust." Mr. Kirby was told that he could lose his dealership if he did not pay Chrysler Credit for the vehicles as to which he was out-of-trust. Chrysler Credit temporarily floor planned several of plaintiff's used vehicles, and plaintiff borrowed $48,000 and invested the proceeds into the dealership to pay Chrysler Credit. Plaintiff also hired Harry C. Williams as sales manager for the dealership in the hope that Williams would help plaintiff with his inventory and cash flow problems, and eventually buy into the dealership.
Vehicles for which plaintiff had not placed orders began arriving in the summer of 1976 during the 1976 model year build-out program. The build-out program is the period from May to September in which dealers attempt to sell their inventory of the outgoing model year vehicles, at a loss, if necessary, in order to make room for the new model year vehicles.
The sale of unordered vehicles was a common practice at this time in the Washington Zone. Mr. Robert C. Kackley, a Chrysler dealer during this period in Salisbury, Maryland, and competitor of plaintiff, was the representative for the nineteen dealers in the Salisbury District to the Washington Zone Dealer Council. The Washington Dealer Council was the representative body of Zone dealers which brought items of general dealer interest and concern to the attention of Chrysler's Washington Zone officials, with whom it met periodically. His uncontroverted testimony was that District Managers would telephone dealers from hotel rooms and put pressure on them to order vehicles from the Sales Bank. The Sales Bank was a pool of vehicles manufactured by defendant without dealers first submitting orders, and held in reserve on storage lots. Vehicles from the Sales Bank could be ordered without submitting a written order form. Typically, the vehicles in the Sales Bank were "dogs" larger, harder to sell vehicles. The District Managers would refuse to fill orders from dealers for more popular models, or "kittens", unless the dealer agreed to order "dogs". Even if the dealer refused to order vehicles from the Sales Bank, they were delivered to his dealership and placed on his floor plan with Chrysler Credit. This practice was referred to as the "slugging" of vehicles."
