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  #1  
Old 05-12-2009, 05:28 PM
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Government running the car companies

So I hear that the government will require GM to close 2500 dealerships.
Someone will have to explain how that is a good idea to me.

From what I understand, when Starbucks announces that it will close 1000 stores, they can show how that saves them money.
Not so with auto franchises--the entrepreneur invests his own money; not GMs. IOf they make money or lose money, GM is not involved other than supplying the cars that got sold. In fact dealerships pay fees to GM; GM does not pay the dealer. So the net of closing 2500 dealerships will be to reduce capital flowing into GM.

So why close them?
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Old 05-12-2009, 05:29 PM
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Probably to dealerships in a specific line like Hummer, Pontiac and Saturn
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Old 05-12-2009, 05:33 PM
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an interesting read on the subject of "Government running the car companies"
http://blogs.ajc.com/thinking-right/2009/04/01/smith-wesson-lessons-for-gm/
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Old 05-12-2009, 05:40 PM
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That was also my question regarding the 800 Chrysler/Jeep dealers being closed down. It seems to me the more outlets you have, the more cars you can sell, right?
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Old 05-12-2009, 06:14 PM
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Still has to factor out to excessive overhead on GM's dime.

Fewer dealers means that you have to service fewer people due to the severe drop in demand in all product categories.
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Old 05-12-2009, 07:09 PM
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I don't see how GM can shutdown a dealership. I can see them backing out of their contract with the dealership. But how can they force them to close. I mean if I owned a Chevy dealership I'd be looking to Toyota, Honda or even Kia, or some other stable company to supply the cars.

I bet the Korean companies make a push and sign contracts with these "closed" dealerships.
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Old 05-12-2009, 08:00 PM
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Gotta love the government - they've cured cancer, solved poverty in America, solved literacy in America, fixed the economy, and now they're finally going to fix our car problem. Thank you Government!!!
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Old 05-13-2009, 08:10 AM
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Quote:
Originally Posted by POS View Post
Gotta love the government - they've cured cancer, solved poverty in America, solved literacy in America, fixed the economy, and now they're finally going to fix our car problem. Thank you Government!!!
Don't forget our retirement and healthcare!

Just teeming with efficiency and success stories.
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Old 05-13-2009, 09:45 AM
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Quote:
Originally Posted by POS View Post
Gotta love the government - they've cured cancer, solved poverty in America, solved literacy in America, fixed the economy, and now they're finally going to fix our car problem. Thank you Government!!!
You've got that wrong. it was the free market that did those.



I hear that it isn't the gov., it's GM that wants to close the dealerships because they've got too many too close to each other.
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Old 05-13-2009, 10:07 AM
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I know dealerships aren't making any money on cars because the average Joe can drive a few miles down the road to the next dealer... The 2-3 dealers wind up bidding against each other to invoice. Only idiots obsessed with their payment rather than the bottom line pay sticker.
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Old 05-14-2009, 01:04 PM
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Originally Posted by SirNik84 View Post
I don't see how GM can shutdown a dealership. I can see them backing out of their contract with the dealership. But how can they force them to close.



The way they closed down the local Pontiac/Buick/Cadillac/Jeep dealer in my town was that GM simply sent a battalion of 18 wheeled "portable parking lots" and repossessed the entire inventory of 120 new vehicles on the lot, each one of which apparently was not dealer-owned, but financed through GM.


A few county sheriffs stood by while it was done, it happened fast.
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Old 05-14-2009, 02:31 PM
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Quote:
Originally Posted by Jim B. View Post
The way they closed down the local Pontiac/Buick/Cadillac/Jeep dealer in my town was that GM simply sent a battalion of 18 wheeled "portable parking lots" and repossessed the entire inventory of 120 new vehicles on the lot, each one of which apparently was not dealer-owned, but financed through GM.


A few county sheriffs stood by while it was done, it happened fast.
at least they got their cars back so they can be sold for pennies on the dollar when GM files for Federal Bankruptcy.
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Old 05-14-2009, 10:07 PM
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Anyone else see Fritz Henderson, the new head of GM, on Beck today? He seemed earnest, but I think he may be a bit overly optimistic.
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