Up to 1,900 GM and Chrysler dealerships are closing

[American Horse]

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?

CNN Money.Com - The cuts, as planned, will result in the loss about 140,000 jobs, according to NADA.

Since they are independently owned and operated businesses, an auto dealership does not cost a manufacturer much money, the groups point out. Instead, dealerships are a source of income since they - not customers - actually buy cars from the manufacturers.

That's something often lost on outside observers, said Gary Dilts, formerly head of sales at Chrysler and now a senior vice president at J.D. Power and Associates.

"There seems to be almost a sense that these dealerships are a financial burden to the carmakers, and they're really not," he said.

 

[WiseOldMan]

GM still makes cars?

 

[ba1614]

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.

 

[WiseOldMan]

Maybe they should change the name from General Motors to Specific Motors.

 

[WiseOldMan]

Or maybe Captain Motors.

Perhaps Sargent Motors?

Private Motors?

Maybe change it from General Motors to Car Company.

 

[pete]

Car prices will be going up, credit will be tighter (harder to get financing) and its like home depot on every corner ....

 

[American Horse]

Car prices will be going up, credit will be tighter (harder to get financing) and its like home depot on every corner ....

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.

 

[wimpy77]

Car prices will be going up, credit will be tighter (harder to get financing) and its like home depot on every corner ....

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.

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.

 

[oreo]

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.

 

[American Horse]

Car prices will be going up, credit will be tighter (harder to get financing) and its like home depot on every corner ....

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.

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.

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.

 

[Zoomie1980]

Car prices will be going up, credit will be tighter (harder to get financing) and its like home depot on every corner ....

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.

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.

The decision to close should be entirely up to the individual dealer. The cost to the manufacturer to support a dealership is minimal. All they have to do is not send as many cars to them if they want to cut back on output. Many of these dealers will naturally go out of business all on their own. That way, your BEST dealerships survive and the weak ones are the ones to go. As it is now, many of the strong ones are being closed which makes no sense at all.