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negusm
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Joined: 25 Aug 2004
Posts: 5183
Location: Charlotte, NC
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 Posted: Thu Jul 02, 2009 7:21 pm Post subject: |
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| ProTouringASC wrote: |
How does a dealer cost the car company any money? The dealer owns his own land, or leases it from whomever does own it. A dealer owns his own inventory, or he floorplans it through either the manufacturer or a local bank. He pays for everything from the sign out front to the paper floor mats!
The best I can tell, the only reason the current administration wants fewer GM and Chrysler dealers is so Toyota and Honda can sell more cars...
Shiny Side Up!
Bill |
Very good question.
The head guy from Chrysler explained it (I wish I could find the link). Basically, they were in the process of watching their entire dealership body go belly up. Dealerships have been losing their financing (bank won't give them money to buy cars) and are posting losses for the year. These near dead dealerships can hang on by a thread for months, maybe years and in the process poison the nearby dealership that is surviving by forcing his prices to be lower than they should be. Then all of a sudden you have TWO Chrysler dealerships that are on their way out instead of one.
By eliminating dealerships the healthier ones will stabilize and turn profitable. They will buy more cars, have more money to expand their business and provide better service. The hope is that this increases customer satisfaction and turns into even more sales.
The long and short of it is...either cut now and get the dealership body at a point where it can be healthy profitable and even grow again or get saddled with a dealership body that is slowly dying off one by one and poisoning what good dealerships you have.
Put yourself in a Chrysler Dealer's shoes who has another Chrysler dealership 20 miles away. That guy is breathing down your neck, he's cutting every dollar he can. He lays off guys. Hires high pressure sales guys who piss off customers, hires cheaper mechanics who don't know the product and cuts corners on warranty work. So you MUST do the same, you have no choice. It turns into a race to bankruptcy for both of you. Then! All of a sudden Chrysler comes a long and AXES the other guy. Wow. Your sales spike 30% overnight. Sure you increase your prices, but its only enough to keep them from going to the guy 50 miles away. The extra money lets you do warranty work correctly, keep the senior guys on who know Chryslers like the back of their hand. Maybe even toss a customer a loaner more often than not. Sure it sucks for the dealership that got canned but the Company survives, and is better.
Well, that is the hope. It still doesn't change the fact that if you still make a crappy product, nobody wants it.
-Mike
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ProTouringASC
Joined: 18 Sep 2006
Posts: 352
Location: Lenoir City, TN
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| Posted: Fri Jul 03, 2009 10:28 am Post subject: |
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| negusm wrote: | We don't have enough oil to bother to drill for. The only reason the topic is that big oil knows they can probably pick up a few extra $$ for free since they could get the drilling rights for free, the permits for free and probably subsidies to drill for free.
If we did drill seriously for oil, do you think YOU would see any $$ from it? The people in charge would figure out how to divert all of it to the oil corporations or their own pockets.
Think "state education lotteries". They claim to put money into the education system but once established, the education system's current budget is either frozen or slashed by the amount the lottery is expected to provide. So where did all that money really go?
-Mike |
Actually, many of the oil companies already have the drilling rights to quite a bit of US oil, but the US government will not allow them to develop the fields. Worse, in some of the off shore areas, countries like Chine are drilling into our reserves!
Shiny Side Up!
Bill
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ProTouringASC
Joined: 18 Sep 2006
Posts: 352
Location: Lenoir City, TN
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| Posted: Fri Jul 03, 2009 10:30 am Post subject: |
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| negusm wrote: |
Very good question.
The head guy from Chrysler explained it (I wish I could find the link). Basically, they were in the process of watching their entire dealership body go belly up. Dealerships have been losing their financing (bank won't give them money to buy cars) and are posting losses for the year. These near dead dealerships can hang on by a thread for months, maybe years and in the process poison the nearby dealership that is surviving by forcing his prices to be lower than they should be. Then all of a sudden you have TWO Chrysler dealerships that are on their way out instead of one.
By eliminating dealerships the healthier ones will stabilize and turn profitable. They will buy more cars, have more money to expand their business and provide better service. The hope is that this increases customer satisfaction and turns into even more sales.
The long and short of it is...either cut now and get the dealership body at a point where it can be healthy profitable and even grow again or get saddled with a dealership body that is slowly dying off one by one and poisoning what good dealerships you have.
Put yourself in a Chrysler Dealer's shoes who has another Chrysler dealership 20 miles away. That guy is breathing down your neck, he's cutting every dollar he can. He lays off guys. Hires high pressure sales guys who piss off customers, hires cheaper mechanics who don't know the product and cuts corners on warranty work. So you MUST do the same, you have no choice. It turns into a race to bankruptcy for both of you. Then! All of a sudden Chrysler comes a long and AXES the other guy. Wow. Your sales spike 30% overnight. Sure you increase your prices, but its only enough to keep them from going to the guy 50 miles away. The extra money lets you do warranty work correctly, keep the senior guys on who know Chryslers like the back of their hand. Maybe even toss a customer a loaner more often than not. Sure it sucks for the dealership that got canned but the Company survives, and is better.
Well, that is the hope. It still doesn't change the fact that if you still make a crappy product, nobody wants it.
-Mike |
And it would be a great explanation if it weren't for the fact that GM is closing profitable franchises. I can think of several in this area that lost multiple GM and Chrysler franchises.
Shiny Side Up!
Bill
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...it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. |
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negusm
Site Admin
Joined: 25 Aug 2004
Posts: 5183
Location: Charlotte, NC
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| Posted: Fri Jul 03, 2009 1:37 pm Post subject: |
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| ProTouringASC wrote: | And it would be a great explanation if it weren't for the fact that GM is closing profitable franchises. I can think of several in this area that lost multiple GM and Chrysler franchises.
Shiny Side Up!
Bill |
The GM/Chrysler execs may see things in the numbers we don't. I think the explanation makes sense when you take a long term view. They may know that Toyota/Honda/Hyundai/Kia are about to enter certain areas and the dealerships there would be hit hard. A long term view doesn't always make sense today.
You can also blame the states. They have laws that pretty much make it impossible for an automaker to close a dealership except when in bankruptcy where only the judge can do it. So I can imagine that some of these guys were axed for no reason other than, "we have to do it now cause we can't do it later". Taking the chance that the two dealerships in an area survive the long term is not worth it when you can ax one and KNOW that that dealership is going to survive.
Another reason I can think of, is that the big 3 axed some guys because they were already selling the competion's product (Hyundai/Kia). I never understood why they even permitted that unless they had no choice based on state law.
-Mike
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Sandy
Joined: 26 Aug 2004
Posts: 6205
Location: Northern New Jersey GSP Exit 148
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| Posted: Fri Jul 03, 2009 3:38 pm Post subject: |
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I don't feel like writing a book, today, so I'll address one part.
Chrysler closed all points that sold only one brand, or had two brands, but not all 3. This was a cost cutting move on Mother Mopars balance sheet.
The MOPAR parts truck would have to stop on 1st avenue to deliver parts to the Dodge Dealer, and then drive over to 6th avenue to deliver parts to the Chrysler/Jeepdealer. In SOME areas the Chrysler dealer had been an Imperial, Chrysler, Plymouth Dealer! then in 1993 Imperial was dropped, leaving Chrysler & Plymouth. Now that Plymouth is gone there are (WERE) a pretty decent number of Chrysler Stand Alone Stores.
Then, to those who recall, JEEP was a brand of American Motors, Formerely Rambler. When American Motors gave up, ChryCo bought Jeep. Allough there are (WERE) only 57 JEEP Exclusive stores in the USA, They were cloesed recently.
Can you imagine have 18 wheelers on the road, in a suburban residential area stopping at a Dodge store, then a Chrysler Exclusive store and then a Jeep store all in, say 8 blocks of each other ?? Each stop, delivering parts? The driver has to pack up and close up and drive 4 blocks to the next dealership, and do it all again!
SOooo, it was good business sence to combine. There are many Ford/Mercury/Lincoln stores and all kinds of GM combinations, so....this move was a good one!
_________________
Sandy passed away in 2012. He will be forever missed.
1990 Final Car prior to the 12 Silver Anny Editions
1990 Silver Pearl Anny Edition
1986 Coupe Full Pkg #109 of 114.
http://public.fotki.com/ascmclaren/ascmclaren_capris/sandys_mclarens/ |
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negusm
Site Admin
Joined: 25 Aug 2004
Posts: 5183
Location: Charlotte, NC
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| Posted: Sat Jul 04, 2009 1:58 am Post subject: |
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| Sandy wrote: | | Chrysler closed all points that sold only one brand, or had two brands, but not all 3. |
This would also speak to the future ability of the dealerships to survive. A single brand Chrysler has carved such a niche that they leave themselves very vulnerable to a market change. When Chrysler decides to change their brands around as to what market they cover, these single brand dealerships wouldn't be able to adjust.
-Mike
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Sandy
Joined: 26 Aug 2004
Posts: 6205
Location: Northern New Jersey GSP Exit 148
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| Posted: Sat Jul 04, 2009 5:11 am Post subject: |
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With Pontiac having 2-4 months to go (I can't believe I just typed that  ) Pontiac exclusives will be empty stores. In multi-make GM stores Pontiac will vanish... GM is combining Buick, GMC & Cadilac in many locals (as in HERE) and Most Chevys will be stand alones.
Oh, for the good old days....
Cadillac, Buick, Oldsmobile, Pontiac, Chevrolet, Saturn, GMC Truck.
Lincoln, Mercury, Ford
Imperial, Chrysler, DeSoto, Dodge & Plymouth.
American Motors & Jeep
and REAL names, NOT XJ 350Xi BUT Bonneville, Starfire, Electra, Adventuer,
LeBaron, Sport Fury, Park Lane, Maurder, Polara, Monaco, Riviera, Toronado, Galaxie 500, Fleetwood Sixty Special....etc.
It's never gonna be good again.....
George: Hey Fred, I hear you boght a new car, wadcha get?
Fred: I got a good deal on a EIE-IOXi and traded in my JF55X SUV
but my wife still has her S431X-S
But next year I am buying her a new C-Class 3 Series X - IS
 
_________________
Sandy passed away in 2012. He will be forever missed.
1990 Final Car prior to the 12 Silver Anny Editions
1990 Silver Pearl Anny Edition
1986 Coupe Full Pkg #109 of 114.
http://public.fotki.com/ascmclaren/ascmclaren_capris/sandys_mclarens/ |
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RARE-ASC
Joined: 18 Dec 2004
Posts: 1198
Location: Canton Ga
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| Posted: Mon Jul 06, 2009 1:39 am Post subject: |
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How dare u misspell Marauder! 
| Sandy wrote: |
American Motors & Jeep
and REAL names, NOT XJ 350Xi BUT Bonneville, Starfire, Electra, Adventuer,
LeBaron, Sport Fury, Park Lane, Maurder, Polara, Monaco, Riviera, Toronado, Galaxie 500, Fleetwood Sixty Special....etc.
It's never gonna be good again.....
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-DAVID-
MY KEEPERS!
2003 SILVER MERCURY MARAUDER 320 HP 32V DOHC.
2013 FORD F150 RAPTOR "TERRAIN TAN" 4X4 CREW CAB & LIFT ON 37s.
2016 SHELBY MUSTANG GT-H HERTZ EDITION #82 OF 171.
1995 F-350 CREW CAB DUALLY POWERSTROKE FULL BANKS KIT! |
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RARE-ASC
Joined: 18 Dec 2004
Posts: 1198
Location: Canton Ga
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| Posted: Mon Jul 06, 2009 1:43 am Post subject: |
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Hey just found this list and comments really sad
"Official Chrysler List of Dealers & Food for thought
Please follow this link for the Official Chrysler list.
http://online.wsj.com/public/resources/documents/Chryslerdealerlist05142009.pdf
Think about this; You have your Franchise taken away while some of you were out-performing your competition in every key Metric. Next, your franchise (that you paid for) will be possibly be resold to another dealer that Chrysler decided to keep. Last time I looked outside at the flag it was still waiving RED, WHITE and BLUE with STARS and STRIPES.
I would think that the Government would have wanted to see what was used to measure who would be cutoff vs. who would remain. Where is the meat and potatoes to justify this list?"
Yikes!
_________________
-DAVID-
MY KEEPERS!
2003 SILVER MERCURY MARAUDER 320 HP 32V DOHC.
2013 FORD F150 RAPTOR "TERRAIN TAN" 4X4 CREW CAB & LIFT ON 37s.
2016 SHELBY MUSTANG GT-H HERTZ EDITION #82 OF 171.
1995 F-350 CREW CAB DUALLY POWERSTROKE FULL BANKS KIT!
Last edited by RARE-ASC on Mon Jul 06, 2009 3:21 am; edited 1 time in total |
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negusm
Site Admin
Joined: 25 Aug 2004
Posts: 5183
Location: Charlotte, NC
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| Posted: Mon Jul 06, 2009 2:22 am Post subject: |
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| RARE-ASC wrote: | | I would think that the Government would have wanted to see what was used to measure who would be cutoff vs. who would remain. |
No you don't. Then there would be an absolute mess. You would have a mish mash of Congressman trying to save dealerships in their districts and not based on business need.
I know it sucks all around. There are no winners here.
-Mike
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RARE-ASC
Joined: 18 Dec 2004
Posts: 1198
Location: Canton Ga
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| Posted: Mon Jul 06, 2009 3:20 am Post subject: |
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| negusm wrote: | | RARE-ASC wrote: | | I would think that the Government would have wanted to see what was used to measure who would be cutoff vs. who would remain. |
No you don't. Then there would be an absolute mess. You would have a mish mash of Congressman trying to save dealerships in their districts and not based on business need.
I know it sucks all around. There are no winners here.
-Mike |
That whole thing was a copy of comments i found.
_________________
-DAVID-
MY KEEPERS!
2003 SILVER MERCURY MARAUDER 320 HP 32V DOHC.
2013 FORD F150 RAPTOR "TERRAIN TAN" 4X4 CREW CAB & LIFT ON 37s.
2016 SHELBY MUSTANG GT-H HERTZ EDITION #82 OF 171.
1995 F-350 CREW CAB DUALLY POWERSTROKE FULL BANKS KIT! |
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RARE-ASC
Joined: 18 Dec 2004
Posts: 1198
Location: Canton Ga
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| Posted: Mon Jul 06, 2009 3:22 am Post subject: |
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I do thank the good lord above we are selling vehicles and doing well  I worked for the same Ford dealer for 17 years and wanted to do my own deal and get it fully up and going before i turned 40 and i did it and looks like my timing was right on! The new car side has it's plus's but there seem to be less of them. On the big picture i do want to have a new car dealership in future but will have to be a sweet deal for me to get into that!
_________________
-DAVID-
MY KEEPERS!
2003 SILVER MERCURY MARAUDER 320 HP 32V DOHC.
2013 FORD F150 RAPTOR "TERRAIN TAN" 4X4 CREW CAB & LIFT ON 37s.
2016 SHELBY MUSTANG GT-H HERTZ EDITION #82 OF 171.
1995 F-350 CREW CAB DUALLY POWERSTROKE FULL BANKS KIT! |
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shelbyscarab
Joined: 18 Jul 2006
Posts: 1009
Location: The Buckeye State
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| Posted: Mon Jul 06, 2009 4:15 pm Post subject: |
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| ProTouringASC wrote: | | negusm wrote: | We don't have enough oil to bother to drill for. The only reason the topic is that big oil knows they can probably pick up a few extra $$ for free since they could get the drilling rights for free, the permits for free and probably subsidies to drill for free.
If we did drill seriously for oil, do you think YOU would see any $$ from it? The people in charge would figure out how to divert all of it to the oil corporations or their own pockets.
Think "state education lotteries". They claim to put money into the education system but once established, the education system's current budget is either frozen or slashed by the amount the lottery is expected to provide. So where did all that money really go?
-Mike |
Actually, many of the oil companies already have the drilling rights to quite a bit of US oil, but the US government will not allow them to develop the fields. Worse, in some of the off shore areas, countries like Chine are drilling into our reserves!
Shiny Side Up!
Bill |
"....many of the oil companies already have the drilling rights to quite a bit of US oil, but the US government will not allow them to develop the fields."............
ahhh, thank you environmentalists......... 
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