Up to 1,900 GM and Chrysler dealerships are closing

Discussion in 'Economy' started by American Horse, May 19, 2009.

  1. American Horse
    Offline

    American Horse AKA "Mustang"

    Joined:
    Jan 23, 2009
    Messages:
    5,741
    Thanks Received:
    892
    Trophy Points:
    153
    Location:
    The Hoosier Heartland
    Ratings:
    +938
    By some estimates a lot more than that. Is there something wrong with this scenario?

    What‘s the benefit of closing all these dealerships? What is the cost of a dealership to either of these manufacturers?

    One dealer being closed said “I suppose there are some costs to the manufacturer in keeping dealerships open….” The same Chrysler dealer in Long Island, N.Y. stated today that his dealership is one of the most profitable in his area. He says that he knows of some dealerships in his area are much less successful than his, but are being kept open. Jim Anderer told Long Island's Newsday that he plans to fight the termination in court. "I want to know how this happened in America," I've got single mothers working here and single fathers struggling from paycheck to paycheck," he said. "How am I going to tell them we've been terminated for no reason?"

    Anderer said he will have to lay off his employees if he is not successful in court. A Chrysler spokeswoman, declined to comment. Anderer said. "I am a business that makes more than $1 million a year. I employ 50 people on Long Island. I've been terminated for no reason."

    A good question would be "Wouldn’t the ones that are the most successful in sales be the dealerships that are least costly to Chrysler and GM to allow to remain in operation?"

    What are the costs of these dealerships to the GMC and Chrysler; distribution of sales materials and administrative support, or some inefficency? It seems the most successful dealerships would tend to make corporate advertising expenses less necessary, and yet corporate advertising expenditures is one of the things that is planned to be cut by Chrysler and GM.

    If these are reductions mandated by the government, shouldn’t someone be asking what is attempted to be achieved? How much is the Car Czar (AKA the Obama Administration) involved in these decisions that seem to bear no relationship to a competitive free market?

    It's my understanding that those dealerships being closed will have some grace period before they are removed from the company’s support system. During that time they will still be considered to be “company” dealerships, but after that status has lapsed they will not be able to sell those units as company dealers; with what consequences; retraction of company support for the warrantees?

    Or worse still, though I can’t recall where, I’ve heard that dealerships being closed with left over inventory will not be able to return that unsold stock to the manufacturers. Under what auspices or "umbrella" can they then be sold, or will they able to sell them at all? Won’t these dealerships face almost certain bankruptcy? Is this the new schemata for a free enterprise system we are looking forward to in America? and what underlies that schemata - a fear of the central government?

     
    Last edited: May 19, 2009
  2. WiseOldMan
    Offline

    WiseOldMan Member

    Joined:
    May 17, 2009
    Messages:
    50
    Thanks Received:
    8
    Trophy Points:
    6
    Ratings:
    +8
    GM still makes cars?
     
  3. ba1614
    Offline

    ba1614 Silver Member

    Joined:
    May 9, 2009
    Messages:
    3,812
    Thanks Received:
    875
    Trophy Points:
    98
    Location:
    Deep in the Northern Woods
    Ratings:
    +876
    I would really like to know what criteria they are using to cut them off. There doesn't appear to be any rhyme nor reason to it, from what I've read about it so far.:confused:
     
  4. WiseOldMan
    Offline

    WiseOldMan Member

    Joined:
    May 17, 2009
    Messages:
    50
    Thanks Received:
    8
    Trophy Points:
    6
    Ratings:
    +8
    Maybe they should change the name from General Motors to Specific Motors.
     
    • Thank You! Thank You! x 1
  5. WiseOldMan
    Offline

    WiseOldMan Member

    Joined:
    May 17, 2009
    Messages:
    50
    Thanks Received:
    8
    Trophy Points:
    6
    Ratings:
    +8
    Or maybe Captain Motors.

    Perhaps Sargent Motors?

    Private Motors?

    Maybe change it from General Motors to Car Company.
     
  6. pete
    Offline

    pete The food stamp president

    Joined:
    Oct 31, 2008
    Messages:
    1,581
    Thanks Received:
    232
    Trophy Points:
    98
    Ratings:
    +232
    Car prices will be going up, credit will be tighter (harder to get financing) and its like home depot on every corner ....
     
  7. American Horse
    Offline

    American Horse AKA "Mustang"

    Joined:
    Jan 23, 2009
    Messages:
    5,741
    Thanks Received:
    892
    Trophy Points:
    153
    Location:
    The Hoosier Heartland
    Ratings:
    +938
    GM and Chrysler don't have any costs in these dealerships. These dealerships make the manufacturers money. There are as many as 3,600 dealerships which will be closed. Most of these people will be forced into personal bankruptcy, because they will have signed personal guarantees for their "floor plan" loans. And if 2,000 dealers mean 150,000 out of jobs, then 3600 would mean 270,000 soon to be unemployed than are now.

    Since the decisions include shaking off some of their best dealerships, one has to conclude that the administration had something to do with that, and other aspects in this situation. Consider these new CAFE standards: If people can drive further on a tank of gas, they will, and will use the same number of barrels of oil. GM and Chrysler are now on board with this; that's because they are now wards of the "state". And it's as if the extra cost of $1,500 they say and more like $2,000 being added to these vehicles won't reduce sales? In the end gasoline taxes will have to be increased. I truly don't believe the "geniuses" in this administration know what they are doing, or if they do know what they are doing, then they are "evil geniuses".

    Seeing all those gathered for the President's speach about increasing the CAFE standards applauding, was a little like seeing the Wall Street Market crowd gathered at the New York Stock Exchange at the end of a very bad trading day, and clapping as if something good has just happened; I've presumed they do that because there's just about nothing else they can do under the circumstances.
     
    Last edited: May 19, 2009
  8. wimpy77
    Offline

    wimpy77 Member

    Joined:
    Jan 21, 2009
    Messages:
    591
    Thanks Received:
    10
    Trophy Points:
    16
    Ratings:
    +10
    there is simply too many dealers which means too much inventory. cancelling the contracts will keep inventory down. these dealers can fight all they want but they won't win. the 4 that got cut here 2 of them will start selling foreigns or used cars the other two were already basically in bankruptcy.
     
  9. oreo
    Offline

    oreo Gold Member Supporting Member

    Joined:
    Sep 15, 2008
    Messages:
    12,446
    Thanks Received:
    1,960
    Trophy Points:
    255
    Location:
    rocky mountains
    Ratings:
    +4,150
    A good investment for all of you. Make certain you hang on to all your SUV's--& trucks--there are going to worth lots of $$$ in the very near future.
     
  10. American Horse
    Offline

    American Horse AKA "Mustang"

    Joined:
    Jan 23, 2009
    Messages:
    5,741
    Thanks Received:
    892
    Trophy Points:
    153
    Location:
    The Hoosier Heartland
    Ratings:
    +938
    The inventory which might be considered to be excess is bought and paid for by the dealership on their "floor" plan financing; they own it. And having inventory on the lot means they have cars available to be sold. There are too many complaints from really profitble dealerships to believe that it was done in a sensible manner.
     
    Last edited: May 19, 2009

Share This Page