Politics determined which Chyrsler dealerships were closed

[Tom Kirkham]

http://gatewaypundit.blogspot.com/20...-chrysler.html

[acindrich]

And your point is?

[petek]

The point?

Perhaps that when the government nationalizes business then government also controls the market? Imagine trying to compete with a business that can literally print money!

And to top it off... if you disagree with the current government then the government will put you out of business.

[cobra de capell]

Well, so much for this Barack Obama's claim during the election that he was going to run an open, ethical administration. Targeting and destroying the livelihoods of Republican supporters while rewarding his own? Robert Mugabe and Hugo Chavez would nod their heads in approval at this Obama tactic. Small wonder that our federal republic is foundering under this president, and is about to become only a larger version of the banana republics headed by Mugabe & Chavez.

[cobra bill]

Oooh good stuff, and the way you slipped Mugabe and Chavez in there, you da MAN !

[Jamo]

cobra bill...argue the point rather than criticizing the individual.

[elmariachi]

All of the Big 3 have overdeveloped their dealer networks. The dealerships are too close together and most of them are making their money from their used car and part/services business, not from the new products. In order for them to survive, they have to shrink. No matter how they draw the lines, someone is going to cry foul.

[427sharpe]

But how are the decisions being made? As this is happening behind closed doors, out of view, how are the decisions over these folks lives being decided? It seems that FIRST on the hitlist would be those not making the corporation money, yes? And in saturated markets, wouldn't explanations be required about how to decide a profitable business closure decision is made? By volume? By financial strength? As the government now owns a significant share of Chrysler, and has appointed board members, is it too far fetched to assume that politics may be coloring the decision making?

[elmariachi]

Originally Posted by 427sharpe

It seems that FIRST on the hitlist would be those not making the corporation money, yes? And in saturated markets, wouldn't explanations be required about how to decide a profitable business closure decision is made? By volume? By financial strength? As the government now owns a significant share of Chrysler, and has appointed board members, is it too far fetched to assume that politics may be coloring the decision making?

You can bet Chrysler knew it might have to defend its decision and its "cut list" in court at some later point, and the cut list was far more "sterilized." Each franchisee/dealer is assigned a "planning volume" which represents the total number of new vehicles he/she is allocated and mandated to buy from the manufacturer and sell yearly. That number can grow if a dealership can sell more, but it is expected to not shrink much at all, if ever. After all, the idea is maintaining market share against the competition. A dealer must also move a certain dollar amount of parts, and meet stringent requirements around warranty repairs. Lastly, a dealership must make an investment in advertising and growth. All of this results in least and most-favored dealer status. What most people don't know is that at ALL times these manufacturers stack rank their dealers from most to least important, based on a lot of this criteria. So when Chrysler decided it needed to cut, the cut line was already known and in place in a spreadsheet somewhere. We are hearing all the whining about profitable dealers being cut. Just because a dealership is profitable doesn't mean its penetrating the market with enough cars. But what you'll never hear is how many of those terminated dealers were in real financial trouble, in hock to Chrysler in the millions, out of trust on their floorplan financing, and undercapitalized and unable to meet the requirements in the franchise agreements. This needed to happen and is all part of market realignment, politics driven/involved or not.

[Tom Kirkham]

http://volokh.com/archives/archive_2...tml#1243603092

[Dan40]

My question about Chrysler and GM dealer closings is not about their politics. Or if they make their money thru new car sales or thru used car sales and parts and service sales.
My question is HOW MUCH DO THE DEALERS COST THE COMPANY? Or how much will be saved by closing X% of the dealerships.
I can understand if the factory is floor planning the dealers new car inventory, it costs the factory a huge chunk of interest. And I imagine an awful lot of co-op advertising dollars are wasted by dealers running their incredibly dumb local adds. But those are controllable costs. No floor plan. Dealer wants a car in the showroom, he buys it. He wants local adds, go ahead, pay for them.
Otherwise, every outlet is a positive. Parts sales AND service HELPS the brand. Salable used cars ARE going to be sold, They are part of the competition.
Unless the factories are feeding money into dealerships some other way, WHY close them?

[Ronbo]

I can't comment on GM's practice but typically your co-op is a percentage of sales. No sales, no co-op. Even banners, displays, and flyers are bought through co-op.

Less dealers means less choice (at least as far as buying from another GM dealer).

I'll bet if you research the list, a lot of the dealers that got clipped were non-exclusive ones. (also owned dealerships that sold Hondas, Toyotas, ect.)

[427sharpe]

Damn! With fewer dealers around to whipsaw, just imagine what the NEXT 500 will be going for!

[bomelia]

I heard (and would be happy for the source) that Chavez quipped "If we are not carefull, we could end up to the right of Obama"

Mike