Citigroup Underestimated Cash for Clunkers Staffing
If you have been following our SPEAK UP forum or the latest article about dealers holding new car buyers hostage, the question that is on every CARS consumer mind is how long will it take for the NHTSA to approve their application. The question that is on car dealer’s minds is “When will I get paid?”.
Unfortunately, after you read this post, the answer is not encouraging unless the NHTSA to working with Citigroup to pull a rabbit out of the staffing hat with Monster.com or Robert Half International.
Hundreds of consumers have reported that they are still waiting on approvals for transactions that were placed 7, 10 and 14 days ago. This begs the question of whether the NHTSA outsourcing partner, Citigroup, is severely understaffed. So, we started to do some investigation and some practical math and the answers we came up with are alarming.
How Many Worker Bees Are in the Citigroup CARS Hive?
Last week the News Tribune quoted NHTSA CARS spokesperson Rae Tyson that Citigroup recently upgraded their staffing form 100 to 300 persons. Here is the exact text from the article written by Dana Hedgepeth:
“Ray Tyson, spokesman for the NHTSA, said Citigroup, which contracted to help process transactions from dealerships, has beefed up its staff to 300 employees on the clunker program from 100″
Holy Understaffing Batman
Let’s do the Cash for Clunkers sales processing math. We need to discuss two scenarios; Scenario #1 is the number of applications submitted to date and the second will be the applications submitted by the Labor Day Weekend that could represent the entire $3 billion in funding.
Scenario #1 – Let’s assume that 300,000 sales have been made to date which is consistent with the NHTSA saying that the initial $1 billion was gone a week ago.
Staffing: Now let’s assume that a full-time Citigroup worker who has an eight hour shift gets 30 minutes for lunch and two 15 minute breaks. In a PERFECT world that leaves 7 hours a day for uninterupted time for reviewing CARS sales applications.
Since there are many pages that are scanned and uploaded to the NHTSA for every sale, let’s assume once again that this clerk can inspect, review and approve a completed compliant application in 15 minutes. This would include any questions that they may need to ask a supervisor since they all are new to this process.
That means that this clerk can process (7×4) 28 approved applications a day. Let’s add in that they can also reject a dozen applications (about 50%) that are incomplete for any reason.
Weekly Processing Per Person: In one week, a full time CARS sales processing clerk can review and approve (5×24) 120 completed and valid applications. The 120 completed applications/week is very important number. We’ll even give the Citigroup clerks the benefit of being more efficient later, just hear us out.
Where are We Today: Let’s say we have 300,000 CARS sales completed today; some have been submitted and some are still trying to be submitted. The NHTSA CARS sales processing started on July 27th with 100 people and on or about August 2nd the staffing was increased to 300 people.
Sample CARS Math Question: How can you process 300,000 applications is 10 days:
One person can process 24 applications a day or 240 in 10 days. If you take 300,000 / 240 = 1,250 full time staff needed.
If there are only 300 full time staff members, that would mean that dealers will be waiting up to a month or longer to get paid.
If the clerks could process more than 24 applications a day, assume 30 applications a day, dealers would still be out at least 21 days.
Most car dealers do not have the cash flow to last 3-4 weeks.
What Happens on Labor Day Weekend?
We predict that by Labor Day weekend the full $3 billion will be used up meaning that approximately 700,000 car sales will have been made. If you add this sudden influx of sales over the next 3 weeks to the existing backlog, Citigroup would need to train and hire over 2,000 employees to make sure car dealer got paid in a timely fashion.
Is anyone else doing this math?
Is anyone else scared that dealers will be paid much later than promised?
Tags: cash for clunkers, cash for clunkers payments, citigroup, Citigroup Inc., dealers, dealers paid, NHTSA, USD
19 Responses to “Citigroup Underestimated Cash for Clunkers Staffing”
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Doug – A $4,500.00 IOU vs a $45.00 window wash? Really not in the same book. Dealers have $50,000 up to $1,000,000 of cash flow tied up as A/R accounts. What would you do in this case, wait until you get paid or roll the dice and deliver cars knowing the money could run out?
Both Randstand and Adecco (temp agencies) are advertising for claims processor/data entry positions currently in Delaware:
From Adecco:
The candidate would be responsible for processing rebate claims, verifying the claims accuracy and eligibility. The candidate would be required to work with proprietary computer system and Internet to review and process claims. The candidate must be able to adapt quickly to new processes and be comfortable in a very dynamic, rapidly changing environment.
CLAIMS PROCESSING, DEALERSHIP EXPERIENCE, OR AUTO LOAN EXPERIENCE IS A PLUS
From Randstand:
Review claims forms and documents for accuracy and completion, and return items with missing information as necessary.
Determine claims authenticity by examining records.
Responsible for calculating/confirming claim amounts and submitting claims.
Knowledge of Microsoft Office, and Internet Navigation.
Knowledge of commonly-used concepts, practices, and procedures dealing with motor vehicles is strongly preferred.
Pamela: As far as the media is concerned “cash for clunkers” is old news. It had a funding hiccup that was fixed and everything is now running smoothly. They don’t care how the back end process is working or how it is affecting consumers or dealers. The public only cares about how many cars have been sold and what percentage of those were “American” cars. Oh…but did you hear the latest about Michael Jackson’s death? Now there’s a story.
Go to cars.gov, just listed rules and answers for the consumers. The dealerships are not supposed to be letting you hold on to your clunkers vehicles, nor are they supposed to be holding on to your new vehicle pending approval. Nor are they supposed to be requiring you to sign an agreement that if the gov does not pay that you have to.
I would like to know why none of this information is getting out to the general public. I would like to know why we are being kept in the dark in the process. I would like to know how we are supposed to know where our c4c is in the process and why there is not the capability of us being able to verify our information. Some of you are stating that the dealer is not allowing you to take the vehicle until they get the cash from the government. That is wrong! They only need approval for you deal to be solidified. You should not and are not supposed to be held hostage for the money the government will eventually transfer to them. Was is the debicle of understaffing not being reported to consumers and in the media? This is not helping consumers or dealerships or anyone at this point……
Forgot to add, your estimate on the % that gets rejected is highly HIGHLY optimistic.
The secret is, and the dealers won’t tell you this, they’re fucking up the claims applications in so many different ways. The government isn’t going to hand over the money without making sure it’s legit…Generally it goes like this: dealer submits claim, gets rejected due to missing required documents, resubmits with NO CHANGES, which takes another several days to get processed again, and rejected again, repeat..
I’m with “me me” below. Why doesthe tone of your article all have to be filled with scare tactics, negative nancy-ness, or other “I told you so” smugness.
Clint: how did you find your status?
“UNDER REVIEW” just went to “APPROVED” for my deal. I will be taking in my trade and picking up my new vehicle today!
07/28 – purchase/deal finalized
07/29 – C.A.R.S. documents submitted to Gov’t
08/11 – Submission “APPROVED”
Ohhhhhh cry me a river…..welcome to the real world…
30 days to get paid??? boooo hooo guarenteed they (the dealer) would take that long to pay a vendor for something..
window washing
carpet cleaning
lawn care
etc.
So I don’t want to hear they may have to wait 30 days to get paid..
This is the question I asked the NHTSA, but I did not get any numbers.
Question: Can you tell me how many people have been hired to review and approve CARS dealer submissions.
NHTSA Response: We are using five principal entities to assist: 1) Oracle for systems development, hosting, and support: 2) the FAA Enterprise Service Center for systems support and accounting/payment support: 3) Citigroup for transaction processing support; 4) Tombras Group for communications and media support; and 5) Telesis for hotline support.
The obligation amounts by entity vary and will likely change somewhat as the program matures. NHTSA is continually identifying additional resources as needed to meet the increasing demands of the program. This includes using internal agency detailees, hiring temporary staff, and rehiring some individuals with unique skills that had formerly retired. We also use the agency infrastructure, including the administrative support offices such as procurement, budget and personnel, as well as our regional office staff to assist as needed. Oracle is supporting the processing of transactions, and a number of enhancements to these processes are occurring on a daily basis.
Bill -> “…dealer has received funds for 1 out of 49 vouchers submitted…”
I’m starting to think this is the norm and NOT the exception.
The process is grueling so far. The dealer doesn’t know anything about wat is going on and when I can have my car. I understand the program is popular and there is a lot going on but they all should have been prepared for the worst.
My transaction was completed on 07/28 and filed on 07/29. As of 08/10 it is still listed as “UNDER REVIEW”. I am still driving my clunker and the new vehicle is at the dealer. I was expecting this to take some time, but the “unkowns” are frustrating. The dealer and I finished our business almost 2 weeks ago, yet we have no clue about how much longer we will be captive to the process.
Transaction completed August 3rd; new car still on their lot our clunker on their lot too. Dealer says our paperwork for CFC voucher was submitted on the 3rd but as of the 8th, dealer has received funds for 1 out of 49 vouchers submitted since program started. Dealer wants us to take the new car and if vouhcer falls through will consider our clunker a trade-in … at $1800 (but Kelly Blue Book says the trade in value should be $2700) so we said no. For now, just waiting on the CFC voucher to be paid.
So after reading this article I now know that you are an idiot. Thank you for that you have no idea what you’re talking about and I would know for good reasons. You are a very dumb person trying to put down this program and trying to put the blame on Citi. Shut the hell up and shoot yourself.
All paperwork provided to the dealer on July 29th, dealer submitted paperwork on July 31st. Dealer has my clunker, the new car, and has cashed my $5K deposit.
I am resigned that it will probably take a month before I get my car.
Is it worth it to get a $4500 credit? Yes. But still frustrating.
I hope they’re processing in order of the timestamp when they were submitted, and not randomly selecting. It would be very unfair to have newer submissions processed before earlier submissions, and have some early submissions shut out if / when the money runs out.
-> “Let’s assume that 300,000 sales have been made to date…”
To put that 300,000 number into perspective…
According to CARS, they have registered 16,000 dealers.
If each registered dealer had just *ONE* clunker sale per day since the program started, that’s nearly 300,000 sales.
The actual number of sales is anyone’s guess…but it has to be WELL ABOVE 300K at this point…which just makes the point of this article even more concerning.