The difference is that McDonalds franchises most likely don’t buy their inventory, and if they do, it becomes “obsolete” in a few days. And, the structure is usually maintained by the corporation, not the franchisee. This car dealer is now stuck with several million dollars in inventory that he is on the hook for, and has a debt to the mortgage company he was forced by Chrysler to incur (remodeling the dealership). If this is accurate, and it seems to be, Chrysler has just stuck this guy with 6-8 million dollars in obligations that it had essentially promised to cover (dealer support so he could dispose of inventory, and additional access to new cars to provide him with the revenue to cover the remodel).
Everyone seems to be all upset - so what’s the solution? I know - the federal government can throw even more tax payer dollars into the kitty to prop up the individual dealers! Oh wait, we got upset when they were bailing out the manufacturer - that doesn’t make sense.
He still owns a building and he has an inventory of cars that have a value. He has the employees, the knowledge, and the facilities to operate a care dealership. I suggest that the man start selling more cars. Thousands of businessmen make a profit every year in the used car business, I’m guessing this gentleman is one of them.
Someone ask the fine gentleman how much of his annual gross comes from new cars and how much from used? Then someone ask Chrysler how they picked his dealership for closure.
This kind of action should have been taken years ago. A few months ago we were complaining that Chrysler needed to cut the fat and get smarter in how they do business, now that you hear a few sob stories suddenly it’s the big bad government’s fault.
I’m no fan of the bailouts and far from a fan of our current POTUS, but when theory comes to reality and tough decisions have to be made we conservatives get all wishy washy just like the libs do.
We scream “don’t raise my taxes!” but we demand the government services just like everyone else.
We hate the bailout - we said let Chrysler file CH11 - well, where would this guy be if there were no Chrysler? If the government had done what we wanted and let Chrysler fail - there would be no new Dodge dealerships period.
So, now instead of there being none, there will be fewer, and it’s a shame, but it’s not up to government to provide or save businesses. If he wants to ‘show them’ - he should move on, and find a way to emerge victorious. I’m not saying it’s not sad, or even that it’s fair, but it’s necessary all the same.