Dude, where did all the dealerships go?

fintail · May 2009

What a ridiculous conspiracy theory. Some people sure are bitter that their side wasn't able to put up a legitimate challenge in the fall...

dtownfb · May 2009

I wouldn't call Gary's claim ridiculous. We are talking politics and Lord knows that stragner things have happened, like the re-districting of Texas during the Bush years. I'm sure the Democrats did some things during the Clinton years that were politically driven.

I agree that to make the case, you need to know who the surviving dealers supported with their donations. Smart businesses support both parties. Also as pointed out by a previous poster and quoted in an article on Autonews, Jim Press did make that threat to the Chrysler dealerships who did not order new cars in February.

I suspected that the closing of the dealerships would not be based on profit, sales, customer satisfaction, or some other objective measurement. Right now, nothing would surprise me.

fintail · May 2009

Yeah, I too would like to see the sympathies of all dealers. See if a correlation can be reached...somehow, I doubt it. There might be a reason that data isn't mentioned.

But those ones listed must have been at least somewhat profitable for their proprietors to be pissing away money on political causes.

dtownfb · May 2009

But those ones listed must have been at least somewhat profitable for their proprietors to be pissing away money on political causes.

Even dealerships losing money somehow find ways to donate in their community. I think folks within Chrysler had an axe to grind with some of these dealers. I think some of these are legitimate, strategic closures.

The big question is after all these deep discounts are done over the next 2-3 weeks, can Fiat/Chrysler sell cars? Right now Chrysler is moving cars because of the big rebates and dealerships slashing prices. I don't know if Americans are ready to buy an Italian/POS American car for regular price. I don't see this merger working well. I have been wrong before........

gagrice · May 2009

Furor grows over partisan car dealer closings

By: Mark Tapscott
Editorial Page Editor
05/27/09 3:37 PM EDT

Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

Florida Rep. Vern Buchanan learned from a House colleague that his Venice, Florida, dealership is on the hit list. Buchanan also has a Nissan franchise paired with the Chrysler facility in Venice.

"It's an outrage. It's not about me. I'm going to be fine," said Buchanan, the dealership's majority owner. "You're talking over 100,000 jobs. We're supposed to be in the business of creating jobs, not killing jobs," Buchanan told News 10, a local Florida television station.

Buchanan, who succeeded former Rep. Katharine Harris in 2006, reportedly learned of his dealership's termination from Rep.Candace Miller, R-MI. Buchanan owns a total of 23 dealerships in Florida and North Carolina.

Also fueling the controversy is the fact the RLJ-McCarty-Landers chain of Arkansas and Missouri dealerships aren't being closed, but many of their local competitors are being eliminated. Go here for a detailed look at this situation. McClarty is the former Clinton senior aide. The "J" is Robert Johnson, founder of the Black Entertainment Television, a heavy Democratic contributor.

http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows- -over-partisan-car-dealer-closings-46261447.html

http://gatewaypundit.blogspot.com/2009/05/shock-big-dem-donor-group-gets-to-keep- .html

gagrice · May 2009

How about Reuters take on this conspiracy theory. I know many of you believe our leader is above reproach.

Plan to ax dealers not Chrysler's decision -lawyer

* Dealers call termination plan 'unconstitutional'

By Nick Zieminski

NEW YORK, May 26 (Reuters) - A lawyer for Chrysler dealers
facing closure as part of the automaker's bankruptcy
reorganization said on Tuesday he believes Chrysler executives do not support a plan to eliminate a quarter of its retail outlets.

Lawyer Leonard Bellavia, of Bellavia Gentile & Associates, who represents some of the terminated dealers, said he deposed Chrysler President Jim Press on Tuesday and came away with the impression that Press did not support the plan.

"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers," Bellavia said. "It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force."

He added the government task force, which he criticized for having no members with retail experience was, in effect, attacking U.S. entrepreneurs.

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSN2632731920090- 526

Dealers failing by natural attrition seems so much more logical to me.

dtownfb · May 2009

"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers," Bellavia said. "It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force."

Prior to filing for bankruptcy, Chrysler was actively consolidating their dealerships. I personally know of one situation where Chrysler blocked the sale of a dealership to an individual and eventually closed the dealership. They did conpensate the owner. In my own town, they did "encourage" consolidating two dealerships. Ford is also doing this as well as GM. The reduction of dealerships was in each of their plans because they knew that many buyers were playing local dealers against each other to lower the price of the car. Maybe it was not the way Chrysler wanted to reduce the number of dealers but then again, when you go begging to the government for money saying you can't survive with out help, this is what you get.

Chrysler and GM thought they would get a blank check from the government with the bailout loans similar to the way Paulson did with the first $350B. Instead you have an administration who is telling these two mismanaged companies that their turnaround plan were unacceptable and forcing them to do what they should have done themselves.....and I think we all agreed that both Chrysler and GM plans were pathetic at best. Quite honestly, without the government's help with this bankruptcy, Chrysler would have to liquidate. You may be OK with this living in CA and me in PA but the folks in the middle of the country where unemployment is already in double digits might think otherwise. I don't agree with everything the government is doing including forcing the closure of the dealerships. It would have been nice to let Chrysler and the dealerships handle this but Chrysler had/has neither the time or money to accomplish this. The big question is where is Cerberus in all of this mess????? BTW, ask Jim Press what his plan was to get Chrysler out of trouble....threaten these very same dealers to buy cars from the factory that they can't sell?

Believe it or not I agree with you regarding smaller government but everyone seems to forget the financial situation we are in. The financial markets (NY, SF, Chicago, London, Toyko, etc.) got us in this mess with over leveraging and greed. Guess what? The financial capital of the world will be Washington DC for the next few years until we can recover from this mess. Unlike you I am not angry with our current president (or past president) with the government spending. I'm pissed off at all the greedy bastards who took advantage of people through the housing markets; invested people's retirement money in worthless and risky stocks and bonds; and put our entire banking system on the backs of the housing market (UN@#$#@#$BELIEVABLE). We were not practicing capitalism the last several years. It was greed and corruption.

You cna continue to blame President Obama but none of actions has caused any of these problems. (And please don't try to predict the future because no one knows how this spending will affect us.) GM and Chrysler were past fixing before Jan. 20th. He is not the one who approved and gave out $350B to the banks with no strings attached. You may not like what is going on but before you make statement like calling President Obama an idiot, think about how we got into this financial mess and who truly is to blame. If you have an answer on how to fix this mess, Let's hear it! Doing nothing, like you are suggesting with GM and Chrysler, is not an option that the President of the United States has.

Many of us on Edmunds claimed that a governement backed bankruptcy is the only chance of survival for GM and Chrysler. Now that it is happening, people don't like what is going on! We got what we asked for. Now Chrysler is going to survive and get the partner they need. heck, the tax payers will likely get their money back from Chrysler evn if they are force to sell a few years down the road. I would not have approved any of this. I would have put the burden on Cerberus to fix Chrysler but jobs will be saved. I can live with being wrong in this one. I won't buy a Chrysler but they don't sell anything I like anyway.

gagrice · May 2009

You cna continue to blame President Obama but none of actions has caused any of these problems.

It would be crazy to blame Obama for the mess in the Domestic auto industry. What I don't like is his philosophy of more government control of the private sector. What started this latest round is taking Chrysler franchises from one dealer to benefit another. This smells of Chicago politics. You know the place where you can buy a Senate seat if you have enough cash. I think Obama is running the country with the same kind of underhanded politics that he was trained on.

Unlike you I am not angry with our current president (or past president) with the government spending. I'm pissed off at all the greedy bastards who took advantage of people through the housing markets; invested people's retirement money in worthless and risky stocks and bonds; and put our entire banking system on the backs of the housing market (UN#$##$BELIEVABLE). We were not practicing capitalism the last several years. It was greed and corruption.

There are too many thieves in that nest to name them all. And I fully agree with you. I have said before if Obama is able to crack down on offshore banking to avoid taxes he will go a long ways toward changing my mind about him. I think he has bit off way more than he is capable of handling with the auto industry bankruptcies.

stever · May 2009

I think I may have gotten to the bottom of the politics behind the dealer closings.

In the effort to save General Motors Corp., the U.S. field general is a little-known 37-year-old named Harry J. Wilson.

The team does much of the analytical research that underpins the task force's policy decisions, conducting interviews, touring auto plants and poring over financial records. That research has given Mr. Wilson a unique perch from which to influence decisions that are pushing the U.S. into its greatest, and most costly, peacetime industrial intervention."

Mr. Wilson has "a blue-chip resume -- undergraduate and MBA degrees from Harvard University -- with a blue-collar history. Mr. Wilson's father had been a bartender, his mother a factory worker who had been laid off three times from dying textile mills in Johnstown, N.Y."

Oh yeah, Wilson is a former hedge-fund star and lifelong Republican, and was president of the Harvard Republican Club in 1991. Who better to analyze campaign contributions?

Young Hedge-Fund Executive Helps Steer Obama Auto Team (WSJ - may be a registration link).

explorerx4 · May 2009

i think loyalty of the local car buyer is being under estimated.
brand preference is lower on their list of priorities and they are being alienated by losing that connection.

gagrice · May 2009

The dealer makes the brand more than the MFG for many people. I like Drew Ford in La Mesa CA. They are also the VW and Hyundai dealer. I would buy from them ahead of the local Chevy dealer that is also the Lexus dealer. Typical car crooks in my book. Along with the local arrogant Honda dealer. The local Toyota dealer must have some serious management problems. You never see the same people twice in 2 weeks.

I personally think the cuts are a big mistake. Attrition is a much better judge of which dealers should go out of business.

oregonboy · May 2009

"I was a lonely teenage broncin' buck
With a pink carnation and a pickup truck,
But I knew I was out of luck
The day the music died.

I started singin',
"bye-bye, miss american pie."
Drove my chevy to the levee,
But the levee was dry.
Them good old boys were drinkin' whiskey and rye
And singin', "this 'll be the day that I die.
"this 'll be the day that I die."

- Don McLean

stever · May 2009

"I was a lonely teenage broncin' buck
With a pink carnation and a pickup truck,

That would be Napoleon Dynamite. Makes me glad I voted for Pedro. :shades:

It's a different flippin' world these days....

boaz47 · May 2009

But I believe part of the problem is that the manufacturers and dealers hardly ever listen to the consumers. Sure they made cars the consumers bought but did ever seriously consider how the consumer reacted to low cost daily transportation? The Koreans gained market share by offering low cost entry level transportation. Shoot even the Yugo sold a few cars because of cost alone. But the big boys didnt care and things slowed down and even the Korean cars started creeping up in price.

Now the economy is in shambles and it doesnt look like it will recover anytime real soon and the dealers somehow expect people to come in and plunk down 15 to 20k on a car?

The old days may be over and we may be about to enter a new era where the dealerships are no longer the service centers and salesmen are just clerks. Then again things could go back to what we once had and nothing will have changed. Nothing will have changed but the customers who will have learned from the rest of the retail industry that the old prices were too high and everything can be had at the sale price.

Still if the dealerships all went out of business and we got a new model would the consumer care?

dtownfb · May 2009

Not familair with Chicago politics and really hate talking politics for too long. It gets my blood pressure up and resolves nothing.

We are closer than you think in our way of thinking. All we can hope for now is to get out of the auto industry as quick as possible.

oregonboy · May 2009

I predict that we will be out of the auto industry before we're out of Iraq. :sick:

nippononly · May 2009

I don't think the model for car sales that currently exists will change much, even with this large-scale attrition we are witnessing and the additional GM and Chrysler stores they are about to cut loose.

One thing that does seem to be taking hold because consumers like it is the one-price scheme, fixed no-haggle pricing below MSRP. Our local Ford store has had so much success with that, he is now the only Ford store left for miles in all directions!

euphonium · June 2009

the one-price scheme, fixed no-haggle pricing below MSRP. Our local Ford store has had so much success with that, he is now the only Ford store left for miles in all directions!

Wake up! When the dealer declares one price no haggle - what you pay is a lot more than if you haggled. That's why he is now the only Ford store left for miles in all directions!

Do you really believe the dealer's one price is his lowest price?

stever · June 2009

Well, if people could haggle cheaper prices, you'd think the no-haggle Ford store would be the first to close since everyone else would be cheaper.

Lots of people seem uncomfortable asking for a cheaper price so maybe they like the one-price shop better.

nippononly · June 2009

What Steve said! ;-)

Truth is, I would never shop at a one-price store, but most people prefer it. And even me, I am getting lazy as I get older. The internet thing is becoming my fave now, even though I realize that if I haggled in person I could squeeze a few hundred $$ more out of the price. That's not so different from a no-haggle store, except the "one price" is being quoted to me in cyberspace and I am going with the best one I get out of several dealers.

gagrice · June 2009

I am finding it much more efficient to do my negotiating with email. Some dealers will not quote prices. I plainly tell them they are out of the loop with me. There are plenty of dealers that do email just fine. No more cubicle roulette for me. I do not limit myself to my area either. I am getting closer to finding a used Mercedes diesel GL320 CDI that I like. It will probably be bought in another state. Makes for a nice trip for me.

nippononly · June 2009

for GM. They get to dump the "old" and walk away from massive liabilities without any sort of penalty whatsever. It's really quite incredible.

Among the changes they are making going forward is that they are going to insist that some dealers with competing franchises in the same showroom eliminate them, or else the dealers themselves will have their franchise agreement terminated!

GM already has informed 1,124 dealerships that they won't have their franchises renewed when the agreement expires on Oct. 31, 2010. Starting this week, an additional 200 dealers will get similar termination notices.

GM is sending letters via Federal Express tonight to all 5,969 dealerships. Most of them will inform dealers whether they will retain their franchises and what changes they must make to retain their stores. Some dealers will be asked to remove competing franchises from their GM showrooms. Others might be asked to upgrade their stores....

http://www.autonews.com/apps/pbcs.dll/article?AID=/20090601/ANA02/906019914/1018-
(registration link)

Bankruptcy is sooooo convenient for GM. With the Dow jumping UP more than 200 points after the BK announcement today, I really question whether a government-funded Chater 11 was ever really necessary here - they should have liquidated the thing. Now even more dealers will get the shaft. Guess folks looking to open dealerships will be a lot more cautious about chasing a GM franchise in future.

boaz47 · June 2009

Yes the e-mail shopping works pretty well. You go online pick a vehicle and tell them what you want to pay and the interested dealers will respond. A bit like priceline I guess.

The thing that makes me wonder is now that GM went bankrupt we are being told we are the major creditors. If that is the case if I remember correctly not too long ago GM offered to make your payments for a number of months and only if after that time would the repossess your car. Now that we own them can we go and repossess a new GM car because they owe us so much money? Maybe we should get a Corvette while we can?

Now that the UAW owns part of GM will they be docking people's pay for being late?

You know if we step outside of our personal discomfort zone on how this effects our economy and look at the big picture we can see the world for what it is. A place run by the keystone cops. When this whole thing first hit the fan people were in financial trouble and started losing their houses. People started losing their jobs and they were told that they would just have to learn to adjust.

When the banks, wall street and the manufacturers got in trouble they simply turned to the very people that were losing their homes and jobs and asked them not only to forgive the loans but to give them billions of taxpayers money. Then the very companies we are supporting will lay off even more taxpayers and give their executives more bonuses? I take it back, not even the Keystone Cops could have come up with this plan. :P

gagrice · June 2009

What dealer in their right mind would drop a Hyundai franchise to keep a Buick in the showroom. Maybe Lemko.

Nader had some things to say about this GM & C mess:

The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.

Many, many jobs will be lost that could be preserved. There is reason to question whether too many plants and brands are being closed -- a matter that should have been taken up in Congress. Just the closing of hundreds of (GM and Chrysler) dealerships will cost more than 100,000 jobs. These sacrificed jobs will fray communities and impose enormous expenses on government entities that will have to provide unemployment and social relief, while suffering lost tax revenues.

Victims of defective GM products may find themselves with no legal avenue to pursue justice. In the Chrysler bankruptcy, with complete disregard for the real human lives involved, the Obama task force and auto company have maneuvered effectively to extinguish the product liability claims of victims of defective cars.

I think the consumer will be the victim in this whole mess. I agree that liquidation would hurt but for less time than the way we are going about it. Hopefully none of our posters have defective GM or C vehicles as of today. I don't think you will find any dealerships willing to repair them under warranty. Who will pay the dealer with GM in BK court? Will Barry send them a check? :sick:

dtownfb · June 2009

Bankruptcy is sooooo convenient for GM. With the Dow jumping UP more than 200 points after the BK announcement today, I really question whether a government-funded Chater 11 was ever really necessary here - they should have liquidated the thing. Now even more dealers will get the shaft. Guess folks looking to open dealerships will be a lot more cautious about chasing a GM franchise in future.

I see it differently. If GM had filed cchap. 11 bankruptcy without government loans backing them, the Dow would have plummeted because they would have no chance of surviving and would have taken a ton of suppliers and dealerships with them. At least now they have a chance at survival and the dealerships and suppliers can be reduced in a less disruptive manner.

Remember this whole thing is about saving as many jobs as possible.

dtownfb · June 2009

The bankruptcy and the GM restructuring plan are the product of a secretive, unaccountable, Wall Street-minded government task force that assumed power because of a Congressional abdication of historic magnitude. By all rights, the restructuring plan should have been submitted to Congress for deliberative review and decision.

Disagree with Nader on this one. In December, Congress rejected loaning GM and Chrysler the money which is why Bush had to use an executive order (or something) to make it happen. Congress had there chance to be involved in the process and chose not to be involved. Whether it was the right or wrong thing to do is debatable. Also consider that this all HAD to be secretive because of the negotiations involved.

By GM and Chrysler accepting the money to stay in business, they are at the mercy of the government. They had plenty of time to do this turnaround on their own using private money but the lack of vision by their CEO, senior management and Board of Directors lead them down this path. We can debate this until the cows come home. The fact is this is the ONLY way GM has a chance of staying in business. We have debated at length on numerous boards that GM, Ford and Chrysler had too many workers, too many plants, too many dealerships, and needed to make significant changes. it's happening now. Most of us don't like how it is being done but neither GM or Chrysler had the time nor the resources to do it in a humane manner.

If the government had turned their back on GM and Chrysler, both companies would have filed for Chap.7 bankruptcy by now and we would probably see Ford in Chap. 11. ALL GM and Chrysler plants would be closed. All dealerships would be in the process of closing as they sell off any inventory. The UAW pension fund would now be in the government pension plan (tax payer paid, of course). All of this at a time when the Dow was hovering around 7000 and there was still talk of nationalizing the banks. Timing is everything. If this had happened 2-3 years ago, no big deal as either company could have raised the funds needed or sold to a group of investors. but it's June 2009 and we are 16 months into a deep recession with unemployment expected to top 9%.

Whatever happened to Cerberus? I haven't read anything about them during this entire process.

gagrice · June 2009

Whatever happened to Cerberus?

They gave up their interest early on in the process. They did not want to throw good money after bad. They still have controlling interest in GMAC. Which we gave them a few Billion to bolster the lending for those wanting to buy cars.

ALL GM and Chrysler plants would be closed.

I thought they were. Didn't Chrysler shut down all their plants in December?

DETROIT  General Motors said on Thursday that it would idle 13 of its 21 North American assembly plants for much of the summer, as it tries to reduce inventory at its dealerships and show the Obama administration that it is serious about shrinking its business enough to be viable.

The closings will start as soon as May 4 and cut production by 190,000 vehicles. A pickup truck factory in Fort Wayne, Ind., will shut down for 11 weeks, and a sport utility vehicle plant in Arlington, Tex., has nine down weeks scheduled.

The question, will any of those ever open again? As long as we supply the cash why would GM want to open plants back up. Under BK they have NO obligation to provide vehicles to the dealers. I think just leaving them shut down will be the best option. Give Ford a chance to gain market share and profitability. Just write off the loss from trying to bail out GM and C. Maybe Fiat can do something with Chrysler. It is doubtful they would be dumb enough to re-open any UAW controlled plants.

As far as the GM pension plan. It was in fairly good shape. If PBGC takes it over which I am thinking they will, the cost to the tax payers will be minimal. The UAW gold plated health care will be gone unless VEBA gets some money from the tax payers. I think that will be one of the cornerstones in Obama's health care plan. The retirees will not like going from what they now get to a very poor government plan.

boaz47 · June 2009

Is the dealerships are simply in the same boat as the rest of us. The dealerships were never asked to bail out the tax payer. The manufacturers were never asked to help the tax payer but when the fertilizer hit the fan the tax payer, who is in just as much trouble as the dealers and manufacturers is being asked to feel sorry for the dealers and manufacturers and bail them out. Is the dealership family more important than the father, mother amd children in every other family in the US? We are being asked to shut up and pull together to weather this storm and we are asked to reach deep and bail out dealerships and manufacturers and banks and wall street.

Does anyone else see this as upside down? Not that many years ago the government made filing personal bankruptcy much more difficult than it has been ever. No private tax payer filing bankruptcy would be allowed to keep as much as GM and on top of being forgiven their debt would be given government money to operate. In personal bankruptcy you migh be forgiven you debts and you creditors might be forced to forgive your debts but they sure wouldn't be asked to give you billions more to keep going. And no government employee could even help a person fill out the paperwork to file bankruptcy let alone work out the details for a person.

The creditors wouldn't be asked to feel sorry for the person filing bankruptcy and they wouldn't feel sorry for any agents that represent the person. Yet we are being asked to feel sorry for dealerships and manufacturers? This sounds like Alice in wonderland. The fat cats see the rest of us paying more for fuel, food clothing and struggling with credit so suddenly they put on a hat and dark glasses and get a tin cup and ask us to help them out. This is just plain crazy. This is not how our system was supposed to work.

We are supposed to be capitalists and as such a company, dealership or bank should survive and be profitable of go out of business to be replaced by another company, bank or dealership.

whatugiv · June 2009

Thats awesome! so once you have a price that you are willing to pay, what are the other reasons you choose to do business with that dealer? Or is it just based on price?

nippononly · June 2009

In December, Congress rejected loaning GM and Chrysler the money which is why Bush had to use an executive order (or something) to make it happen. Congress had there chance to be involved in the process and chose not to be involved

What are you talking about? They WERE involved. Their decision was a resounding 'NO'. At which point they were circumvented by the executive branch, which never should have happened.

nippononly · June 2009

I don't know about feeling sorry for dealers or their families. Part of my point when all this began was to wonder if it made sense to bail out all parts of the automotive supply chain except the actual retailers.

But I think in retrospect my question was answered: the dealer attrition is coming almost exclusively among domestic-brand dealers, where there is plenty of room for attrition given the expected size of the "new" GM and Chrysler.

The third part of my initial point was that dealers are an important component of the local business community fabric - they support little league teams and charitable causes, you name it. In that respect dealer attrition hurts local communities and families. But then, it doesn't do so any more than other small businesses which are also presumably failing in this down economy.

zionswrath · June 2009

how do I post my own topic?

stever · June 2009

Welcome to CarSpace.

Check out the Help link at the bottom. You're posting fine; if you want to start a new discussion, check out this help link.

gagrice · June 2009

Or is it just based on price?

I rarely use the dealer after sale so price is the most important. My impression of dealer service is mixed. Mostly mediocre. I can only remember two dealers throughout the years I would give a thumbs up. Drew Ford/VW and Bob Stall Chevrolet. Toy/Lex dealers are near the bottom. I like independent shops that do not have a huge complex to support.

boaz47 · June 2009

In that respect dealer attrition hurts local communities and families. But then, it doesn't do so any more than other small businesses which are also presumably failing in this down economy.

Once again we have come to an agreement. And that is the point the dealer is not more important than the old paint store that was put out of business by Lowes or Home Depot. There never was any reason to worry about how they survived or even consider bailing them out. In the system we have they should be allowed to fail and then be replaced with whatever comes to replace them. To me this would apply to foreign or domestic dealers. If Suzuki were to leave the country what have we lost? If they were replaced by Fiat would anyone notice in their daily life? Cars are simply a product like a washing machine. They do us a service by taking us from a place of employment or to a place of relaxation. It doesn't matter who makes them because they have no soul they are machines and should be sold like machines. Anyone who can sell a toaster could sell a car and if we didn't have an obligation to return to the dealership we could get the machine serviced at any local service center that works on machines.

The whole system was designed to make us dependant on the dealership because so much of the profit was in the service. Maybe we can take the camel trading part out of things with fewer dealerships and move into the future with the rest of the retail industry. Truthfully this has been a great time if you have the money to be a consumer in the car market. For the first time in years we have been able to walk out of a dealership simply because we didn't like the coffee to buy something down the street because they gave us coffee and a sweet roll.

dtownfb · June 2009

Right! Congress said "No" and President Bush gave them the money anyway. So the problem now resides in the White House. Why involve Congress now as Nader was suggesting? There is no time for Congress to debate the plant closings, dealerships closings, UAW contract, negotiating with the bondholders, etc.

nippononly · June 2009

an interesting little tidbit on the evening news: a piece on the only remaining GM dealer here in Marin County, which is a Chevy dealer at the far end of the county.

It was interesting for a few reasons, first because I didn't know (or had forgotten) that the much larger GM dealer (which was Chevy Cadillac Hummer Saab Hyundai) nearer to me went out of business five months ago after only being IN business for a year.

More interesting was that among other things they announced that the Marin Chevy dealer (a) has made the "cut" - he has been notified he will keep his franchise, and (b) is the only remaining dealer of any GM brands for all of San Francisco and Marin Counties (which neighbor each other). That's an area that includes almost 1.1 million people, the bulk of which are in San Francisco, and yet the only GM dealer in that area, the one they have chosen to keep, is 20 miles out of San Fran in northern Marin.

I understand that right now this is an accidental result of dealer deaths that occurred in the last 12 months, but how is GM going to keep the business of 800,000 residents of SF with this one dealership 20 miles away across the Golden Gate Bridge? And this dealer, BTW, sells about 8 cars a year. They still have new unsold 2007 models on their lot right now. Not to mention they have Chevy only, anyone who wants a Cadillac has to drive 20 miles further, and Buick or GMC? I don't know if there's anywhere left within 100 miles to buy one of those. It amazes me that this is GM's business plan for dealerships.

One plus of all this for the Marin dealership (located in Novato) is apparently the business in their service department has doubled. As the dealer numbers drop way down, it ought to be good news for the few that are left....

gagrice · June 2009

It is not surprising to me. The left side of the state that you reside in has tried to destroy GM for decades. I guess the 12 people in San Francisco with GM vehicles will have a long drive for warranty work.

By comparison I have 8 Chevy dealers within 50 miles and 6 within 25 miles of the house. Too bad they don't sell anything I want. SUVs are still the vehicle of choice for most people in my area. We still have 5 GMC dealers that sell Buick and Pontiac for the occasional Lemko that drops in.

euphonium · June 2009

So who is left on Van Ness Avenue?

whatugiv · June 2009

Right now there are 13 Chevrolet dealers in Arizona, I can think of 5 Pontiac, Buick, GMC dealers, and at least 5 Cadillac and Hummer dealers. All of these are within 50 miles.
I feel for the mom's and dad's filing the paper work, driving the courtesy shuttle, typing the warranty paperwork and servicing the customers. These are the people that are going to be hit the hardest when most of these places start shutting down.
Most of them have already cut back and laid off.

I am not a big fan of Ford but I really respect what they are doing as a company. The big 3 should grab their notebooks and go to class. They could learn something that would benefit thousands. And when its all said and done. Isn't that what it's really all about. Helping others?

euphonium · June 2009

"Isn't that what it's really all about. Helping others?" (a common "feel good" phrase)

Successful businesses give to charity so as to help others, but the most successful enterprise is one that plays "hard ball" & when its all said and done, that is what it's really all about.

Alan Mulally didn't get to where he is by helping Airbus when he was at Boeing.

In the business world today, fierce competition demands toughness.

explorerx4 · June 2009

thanks to fezo for pointing me over to this site.

fitzmall

gagrice · June 2009

There were 40,000 dealers in the 1950s? Hard to imagine that many are gone and going fast. I agree that eliminating dealers is a dumb move. If they go out of business because of poor business acumen or the economy, so be it. Axing dealers that are doing OK is crazy.

http://www.fitzmall.com/DealersAreNotTheProblem/DomesticDealersVsCarsOnTheRoad5-- 28-2009.pdf

bumpy · June 2009

There were 40,000 dealers in the 1950s?

That's not surprising. Back in the old days, there was a Chevy, Ford, Dodge, and AMC dealer here for about 7500 people. One by one, they fell out over the years until only the ca. 1919 Chevy dealer is left (it used to carry Olds, too), and that franchise may not be long for the world now.

stever · June 2009

Dealers have long had political muscle and they are starting to flex it.

"I don't believe companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help. It's just plain wrong," continued Rockefeller who noted the roughly 2,000 Chrysler and GM dealerships being closed across the country put at risk more than 100,000 jobs."

GM, Chrysler Defend Dealer Cuts in U.S. Senate (AutoObserver)

For the conspiracy theorists, Rockefeller is a Dem.

The bankruptcy judge is having none of it.

Judge: Chrysler has good case for franchise cuts (Yahoo/AP)

nippononly · June 2009

Well Toyota and Honda are still there on Van Ness, right where they have always been. Mercedes is still in the City too, and BMW, and I think Royal Motors is hanging in there too, for the Mazda/Audi/VW/Volvo fans among us, although word a little while back was that they were going to drop Volvo for some reason.

Not sure if there is a San Francisco Nissan? Haven't ever heard of one. But basically, it's only the domestics that are out of business on Van Ness Avenue, and the rest of San Francisco too.

andre1969 · June 2009

There were 40,000 dealers in the 1950s? Hard to imagine that many are gone and going fast.

Heck, at one point in the 1950's, there were about 10,000 dealers that sold Plymouth! I believe that was more than any other brand, however, there is a reason. Back in those days, Plymouth was always paired with Dodge, DeSoto, or Chrysler/Imperial. Or sometimes, all three! There's a dealer a few miles up the road from me that used to carry Plymouth/Dodge/DeSoto/Chrysler/Imperial. When Chrysler restructured in 1960, having Dodge on its own and merging everything else, I think that's when they went to Dodge only. For most of my memory, they sold Dodges and Pontiacs, but lost the Pontiac franchise a few years ago. I think they sell Dodge/Chrysler/Jeep now. Well, for the time being at least. :sick:

lemko · June 2009

For something really different - I was in Camp Hill, PA, (which is across the river from Harrisburg) and saw a sign with the Chrysler pentastar with the word "Rootes" below it. If you recall, Rootes was Chrysler's British subsidiary.

stickguy · June 2009

Plymouth Cricket, baby!

stickguy · June 2009

I'm still a tad fuzzy on where the savings are going to come from for GM and Chrysler by closin gdealers. You would think that the market forces would take care of that if needed (as has always happened). Plus, usually more outlets for your product is better.

Also, this new, streamlined, dealer network isn't permanent. I'm sure that once the BR is over and the companies are back up an operational, and the market settles out, there will be obvious areas underserved by certain makers.

So, at some point, new delerships will (re)open in some markets, where it makes sense.

If anything, the best way to figure out how many dealers you need, and where, was to close ALL of them (IOW, pull every franchise.) Then have people bid on the franchises again.

So in the short run closing some small ones hurts at the local level, but it should lead to a "right sized" and better located dealer network. Hopefully.

Or Ford will just take all the domestice business and make Joel happy!

Dude, where did all the dealerships go?

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