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To: khnyny
"If getting Chrysler and GM back to profitability is the goal, why force any dealership to close?" "

There is an annual cost for the manufacturers to keep the dealerships (any dealership) open. So, the dealers have to sell a minimum number of cars to make it worth the manufacturers investment.

Some of these closed dealerships were under-performing and beneath these thresholds. I have no problem with Chrysler or GM closing them. It's the instances where both manufactures are closing wildly profitable and successful dealership, while keeping neighboring and less-performing dealerships that's the problem.

Why were some kept that were losers, while other were closed that were clear winners. Something smells there.

4 posted on 06/04/2009 11:37:49 AM PDT by Big_Monkey
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To: Big_Monkey
Some of these closed dealerships were under-performing and beneath these thresholds. I have no problem with Chrysler or GM closing them. It's the instances where both manufactures are closing wildly profitable and successful dealership, while keeping neighboring and less-performing dealerships that's the problem.

Why were some kept that were losers, while other were closed that were clear winners. Something smells there


Indeed. Has the White House issued a statement on the methodology used to determine the dealership closings, and if not, why not?
11 posted on 06/04/2009 11:43:59 AM PDT by khnyny ("The demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.")
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To: Big_Monkey
There is an annual cost for the manufacturers to keep the dealerships (any dealership) open. So, the dealers have to sell a minimum number of cars to make it worth the manufacturers investment.

Or they can do what I did when I sold my own brand of products in independent stores: underperforming stores were allowed to still sell, but got zero financial support from me.

Chrysler and GM can simply tell those dealers not meeting the minimum qualifications that they will no longer receive financial benefits or support from the manufacturer. They can sell, but will not be financed or assisted by the manufacturer.

The reality is that many of these small, underperforming dealers were actually very strong used car or multi-brand outlets, where they move good volume overall, but the new car sales for a specific brand were small. Being able to claim "yes, we're a GM/Chrysler dealer" helped bring people in, and I bet most of those dealers would sacrifice the sales/marketing contributions of the manufacturers just to keep the manufacturer as an official car line.

If there is a cost associated, I see no problem with eliminating that cost, but it does not have to be reached by cutting the dealer off.

15 posted on 06/04/2009 11:49:47 AM PDT by PugetSoundSoldier (Indignation over the sting of truth is the defense of the indefensible)
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