Posted on 05/27/2009 1:51:46 PM PDT by libstripper
As more than 2,000 fuming Chrysler dealers rallied outside the Jacob Javits Center Tuesday to protest the closing of 789 Chrysler franchises and the company's planned sale to Fiat, a lawyer for some of the dealers said it appears Chrysler executives aren't happy with the proposals, either.
Chrysler intends to sell the bulk of its assets to a group led by Italy's Fiat Group as part of its restructuring to emerge from Chapter 11 bankruptcy protection. The automaker says it will cut costs by ending some dealer-franchise agreements.
A hearing on the motion to terminate the franchise agreements will be held before U.S. Bankruptcy Court Judge Arthur Gonzalez on June 3.
(Excerpt) Read more at recordonline.com ...
After taking a deposition Tuesday from Chrysler President Jim Press, Bellavia [the dealers' attorney] said Press did not seem to support the plan.
"It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers," Bellavia told Reuters. "It really wasn't Chrysler's decision. They are under enormous pressure from the President's automotive task force."
Chrysler's Indiana secured bond holders have moved to remove the case from Gonzalez' court to the district court which supervises Gonzalez' court. In their removal petition they charge that the Obama administration has taken over Chrysler, is actually running it, and is making all the decisions in the bankruptcy. The noted testimony by Jim Press, Chrysler's president, supports that charge. It's going to be very interesting to see how Obama's accomplices explain dealer terminations that look like nothing so much as illegal and unconstitutional political retaliation. Things are rapidly getting messier and messier for the Usurper.
FYI
I guess there will be a class of small business owners comparable to the “kulaks” of Russia for Hussein to scapegoat.
It came up on Cavuto this evening that all the terminated Dealers were GOP doners, but Cavuto questioned it without more proof.
Hope they are still digging on the info.
I dont see how getting rid of people who own dealerships, private businesses, who buy Chryslers will help chrysler make money, Never did.
It doesnt cost Chrysler anything to keep these businesses open, they arent paying the electric bill. If the dealers are losed Capitolism will close them.
Looks more like Obama doesnt like people who support republicans.
I think you’re on to something.
I hope that sue, sue, sue and the real reason for terminating these jobs come out.
The list, ping
I am glad to hear they will fight.
I saw that. The ‘seed’ has been planted.
Obama doesn’t like people who are NOT ON the DEMOCRAT PLANTATION!!
I mean they still have cars to sell and closin' dealers is not the way to do that.
Well, there must be something to it. Honda and Toyota which both sell more vehicles than does Chrysler choose to do so with considerably fewer dealerships.
I believe the argument is that its better to have fewer, better dealers. With more dealers in an area, they cut each other on price of the vehicles they sell, which can hurt brand image. Also, with low margins on vehicle sales, dealers may be less able to provide the level of service preferred by the manufacturer.
IIRC, rather Chrysler costed some of the dealerships last year. I remember reading here a LTTE from a Florida dealer who is being forced to close, after being forced by Chrysler last year to take out a huge loan to upgrade the dealership.
Or perhaps the group will morph into a group like the assassins that worked for Saladin or the group of 44 that conspired against Hitler , or the senators who conspired against Julius Cesar, or the Jews who demanded the crucifixion of Jesus.
History is replete with tales of tyrants brought down by disgusted people
>>>I dont see how getting rid of people who own dealerships, private businesses, who buy Chryslers will help chrysler make money, Never did.
Some excerpts from aBloomberg Article: http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=aVXrNfdjNdQQ
Plans announced last week to shed almost 2,000 retail outlets are designed to bolster the survivors, GM and Chrysler said. Reducing competition from stores with the same brands is supposed to allow the remainder to boost prices and profit, and to reinvest in their businesses to keep adding customers.
That echoes the strategy of Toyota, the world’s largest automaker, in growing to second behind GM in U.S. market share. U.S. stores for Toyota and Honda Motor Co. each averaged more than 1,100 sales in 2008, almost three times as many as GM’s and Chrysler’s, consulting firm Grant Thornton found.....
The strategy at Toyota is pretty simple: keep the dealer count rational, don’t locate them too close to each other and maximize their units per outlet. A profitable dealer can invest in their dealership and personnel. Average new-auto revenue was $14.3 million for GM dealers and $12.8 million for Chrysler last year, compared with $40.9 million for Toyota, based on data from auto-research company Edmunds.com. Dealers also make money on used vehicles, parts and service.
Each GM store averaged 444 new-auto sales, while Chrysler had 405, according to consulting firm Grant Thornton. Ford Motor Co. was similar, at 483. Japan’s three biggest automakers dwarfed those totals, with 1,200 for Toyota, 1,150 for Honda and 764 for Nissan Motor Co., Grant Thornton found.
The big hole in your argument is rentals.
Prices are driven way down by the huge number of rentals the US automakers supply to the agencies. Reducing the number of dealers will not change this. So GM, et al, will continue to offer rebates to stimulate sales that cut into their margins.
So then they’ll end up with dealers that sell 1,000 cars for the same price two dealers did.
And, again, Chrysler is abrogating their franchise agreement with the dealers with complicity from the Obama administration to strip the dealers of any type of protection in bankruptcy court.
If Chrysler wanted to do this above board they they would have bought them out.
“””I believe the argument is that its better to have fewer, better dealers. With more dealers in an area, they cut each other on price of the vehicles they sell, which can hurt brand image.”””
It is doubtful this could be a reason for having fewer dealers in an area.
Most of the competition for any dealer comes from another brand of car. Chrysler’s competitors are GM, Ford, and the many, many foreign car dealerships.
If Chrysler has ten dealerships in a major metropolitan area, then they have more chances to sell a Chrysler product to a person vs. that person going to GM, Ford, Toyota, etc.
True, but who is deciding which dealers are destroyed and what are the criteria?
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