What are the Odds?
All other factors being equal, what are the odds that RLJ's dealerships would remain open while all other area dealerships would be shuttered? The approximate odds of such an occurrence can be calculated. 789 of the Chrysler's dealerships are closing, which represents 25% of the total (according to MSNBC).
Recall that Chrysler claimed that its formula for determining whether a dealership should close or not included "sales volume, customer service scores, local market share and average household income in the immediate area."
Thus, the odds that any, randomly selected, single dealership would remain open is roughly 75%. The odds that a single dealership would close is roughly 25%.
In the Bentonville, AR territory, the odds that RLJ would remain while its competition gets axed is .75 * .25 * .25 = .046875 (4.6%).
In Huntsville, AL, the odds are .75 * .25 * .25 = .046875.
In Branson, MO, .75 * .25 *.25 *.25 = .01171875.
In Lee's Summit, MO, .75 * .25 *.25 *.25 *.25 = .0029296875.
In Shreveport, LA, .75 * .25 *.75 = .140625.
Approximately the odds that I'll win American Idol. Or that you'll land two frisbees, simultaneously, on each of Barack Obama's teleprompters during one of his televised speeches.
Hello, mainstream media: anyone listening? How about you, class-action lawyers?
Just a note about some errors in the statistics. You are applying overall population percentages to local markets. This creates a problem. For example, in a random pull, the odds that all three dealers in Bentonville will be among the 789 closed are .25*.25*.25 = .015. But we know in reality that at least one of those dealerships will remain open, so the population percentages do not apply. The odds of the RLJ dealership remaining open in Bentonville are 1 in 3 if done randomly. This of course ignores any factors such as sales and performance. Given some of the money behind this group (Bob Johnson is a billionaire) these dealerships might be better capitalized and better performing than some of their competitors. There may be corruption or it may be performance based. Further investigation will tell, but please don’t muddy the water with bad statistics.