@peejaybee: Yes I am already aware that the Car advisory network picked up this story from Jalopnik, and from CarDomain. I thank them very much for generating additional page views. You know who else picked up the story?
The Chrysler exorcism started shortly after Cerebus (sp?) took over. Successful dealerships were pressured to expand their facilities and take on inventory to maintain their ranking within the Chrysler hierarchy.
Then Chrysler corporate would swoop in and suddenly find financial "issues" and pull the franchise leaving the dealership owners with inventory on hand. There are implied references made to indicate the dealer has done something illegal in spite of the fact there has been no illegal activity. The inventory would be tied up in probate and the dealership can't sell it. Meanwhile the dealership now has a huge debt incurred from expansion. Bankruptcy is about the only way out.
As to separate dealerships for the brands, who the hell can afford separate facilities for Chrysler, Dodge, and Jeep? UDMan states "Since part of my job deals with evaluating possible new dealers, as well as auditing existing dealers, I'm in the unique position to understand this process."
Sorry, but considering the consistent stories I have heard about from former dealers in multiple states, there may be more to this than meets the eye. Is UDMan presenting "the whole truth and nothing but" or just the true parts that are favorable to the company position?
@dfwguy: "Is UDMan presenting "the whole truth and nothing but" or just the true parts that are favorable to the company position?"
I agree. Here in Detroit, the daily news is consumed with this issue. yet, nobody has been able to explain how closing dealers saves the manufacturers any money. Jim Press had a lengthy interview on one of the local radio stations about the matter and the only thing I got out of it was that marginal dealers can't hire the best people so they hurt the reputation of the manufacturer. But if these dealers can remain profitable, they can't be hurting that reputation too much. Catch the interview here. [www.wjr.com]
It seems to me that this is just another reason dreamed up by a bunch of egghead MBAs at the manufacturers to explain why American companies can't compete. "We have way more dealers than Toyota and Honda. THAT must be the reason we can't compete. Yeah, that's it."
@dfwguy: Let me answer you dfwguy. Chrysler has been pushing separate Chrysler, Jeep, and Dodge stores to merge with each other, and become one store. The reason for this is it saves the manufacturer money in a number of ways, including print (advertising, brochures, placards, etc), personnel (less people to audit separate facilities, less people at call centers, and a lot less support field people for service and parts), and hard assets (including leased signage, computer kiosks at dealerships, reduce the number of trucks used for vehicles, and parts because there are less stops).
About the Seperate Dealerships I talked about, there are a number of dealers who operate dual competing brands in the same building. I'll take a couple of examples I know of. There was (emphasis on was) a Cadillac Jaguar dealer in Hartford, operating under the same showroom. All the owner did was separate the showroom with a glass wall, and that was it. Neither GM or Ford (who owned Jaguar at the time) was happy about it, but they couldn't pull either franchise because of strong franchise laws. There were literally a dozen other dealership owners that promised to put up brand new separate facilities for each brand, following the manufacturers blueprints for square footage, decor, signage, and number of service bays.
Yes I did side with the manufacturer. Because of the strong franchise laws, a dealer didn't have to meet quotas, update facilities, or maintain adequate CSI. The only way they would lose their franchise is if they were criminally negligent, or lose their primary source of funding. After years of having the manufacturers ask politely to update their image, get a competing make out of the same facility, or sell a couple of more vehicles at the expanse of gross margins, the time has come due to the dealers that played hardball.
@tankman: Less dealerships selling the same number of vehicles will save the manufacturer money in the long run. How? Let me explain:
Each and every dealer usually has a minimum stocking level of cars. Lets use a round number like 10. Chrysler just eliminated around 800 dealers, so that will be around 8,000 cars that won't need further factory assistance to move, 8,000 less cars to pay the dealer holdback to, 8,000 less units that the captive floorplan company has to audit.
You also can reduce the number of field support personnel used to support these do nothing dealers, along with reducing the other support structures (less promotional crap to produce, reducing the number of trucks to service the dealers, and the costs go down from there.
With the money saved, you can increase the spiff levels to the strong dealers (spiff is a car term for promotional money or cash given to the dealers or the sales staff) to reach their targets, or better yet, to exceed their targets in stocking levels, and sales levels. Smaller dealers tend to hang on to gross margins, large dealers tend to make less per transaction. This is only the beginning anyway. Stay tuned
I read the seven reasons that your dealership made it and one glaring one was left off. How much money did you give to either to the DNC, your favorite Democrat like Barney Frank or the reelect Obama fund?
If the answer was no to all your done. If the answer was yes to one you might make it. If it's yes to all, your set, plus you get a GM franchise.
@Albert E. Heiles: Well, if it's a Hideous New Tundra (as opposed to a Fairly Attractive Old Tundra) then it was built in Texas. Which isn't really part of America anyway, but more so than, say, Silao, Guanajuato.
Of course nobody seems to notice that there is a healthy dose of The Chicago Way going on here. Those who did not support a certain corrupt politician from Chicago are getting screwed, that is The Chicago Way!
@Triborough: Your logic is just a little flawed my friend. If that were so, all of the Texas Dealers would be closing (well, maybe except for the ones around Austin!), all of the Louisiana, Alabama, Mississippi, Georgia, and, well you get my point.
No this is happening because it has taken years to get rid of those dealers who wouldn't play by Chrysler's rule book (Not stocking cars, not selling enough units, selling more used than new, and not buying or selling out to other dealers to combine one Chrysler Jeep Dodge store) because of very strong local franchise rules.
I have it on good authority that GM may file for chapter 11 tomorrow, and then it will make public those 1,100 dealers than GM notified it no longer wants. I already know of a few GM dealers that won't have their franchise agreements in my local area renewed.
In the Hartford area (and surrounding inner suburbs) there is but one Chevrolet dealer remaining. We lost the following dealers: Cadillac (combined with Jaguar!), 2 Buick/Pontiac Dealers, a Chevrolet/Hummer/Buick dealer, 2 Saturn retailers, and a GMC Truck store. Actually, the economy has dictated most of these loses, as a Lincoln Mercury dealer, and a large Ford dealer has also closed.
Also, I'd like to note that my local area news (KMBC9, with the dealer in the small town of Harrisonville) is by far the best looking local news station. Those other guys look like they work for a high school. Our car dealers may suck, but we've at least got high quality reporting to watch them fail!
"Yo Dawg! We heard you like sellin' cars while you are sellin' cars, so we put a Chevy dealership in your Dodge dealership, so you can sell cars while you are selling cars!"
Ooops! No you're not! Not no more! Uh-uh! No way, Jose! Done! Next!
(By the way, as much as I understand this complaint, how many dealerships are NOT mixed franchises anymore? I would think at least two to one are mixed over stand alone...???)
@bygeorge: It's not too common around here. We've got a couple Ford/Toyota dealers, but most of the time when there's more than one dealership in a chain, they're separate buildings next to each other (like the Toyota/Volvo/Honda/Hyundai dealer in Keene).
When I watched about this on the MSM (ABC World News in this instance), it was a complete cry-fest. Yes, its sad when ever anyone looses their jobs, or a business. But nobody ever shed a tear for the thousands of employees who lost their jobs at Lehman Brothers, or at many of the major companies in my Area. (Sprint, Yellow Freight, American Airlines) This is how business works. Chrysler had a poor businesss model,
business model, and changes have to be made. Fiat knows it, the Federal government may/may not know it. Ok, they probably have no clue, but the poll numbers say it's a good idea!
Sorry if I jumped around a bit. Ah, well, we all can't be as good of a scribe as UDman. And that's one well-written analysis, sir.
@M0L0TOV: @chief wide logger: @Baron Schm Von Shamwoüzen und taxis: Why thank you all for the kind words. I will tell you all that if it wasn't for my addiction to Jalopnik, I would have never started to write as much as I do now, even though I work about 60 hours a week.
I hope you all enjoy my continuing feature over at CarDomain called the Obscure Muscle Car Parking Lot, and while I'm shamelessly plugging away, I have my own collumn over at Rich Truesdell's excellent site, Automotive Traveler, appropriately called "Ramblings". Here's some recent posting in the column:
If I was a cynical person, I'd suggest that Chrysler was having a shitfit about dealers selling multiple makes next to each other because most of their products simply weren't as well put together.
@mdensch: One of the local dealerships just had the sh*t taken out of them. They were a Jeep, Pontiac, Cadillac, and Jaguar dealership - yeah, I know, makes no sense - they were one of the ones Chrysler cut, and obviously Pontiac went away. Add to that, that most people in the area are (and always have been) too poor to afford the others (They've had a XLR on the lot for like three years and there's a brand new 2008 XK) and well... they're screwed. It should be noted that the building they use (and it is only one building) hasn't changed since the late '70s.
@Slurp Fuzzy Homo: Yeah, that just doesn't make any sense. Chrysler's products are so great compared to the competition, so why are they all worried about letting customers see other brands? In fact they should encourage dealers to carry other makes, so people looking for an Accord or Passat can be wowed by Chrysler and their almighty Sebring. And hybrid shoppers will be blown away by the Aspen, with a horsepower-per-mile-per-gallon rating that puts the Prius to shame!
@ummagumma82: Yeah. Basically, if customers are looking for a full-size truck, an inexpensive minivan, or a rear-wheel-drive full-size/muscle car, they might find what they want. But in the last category, they'd be more likely to find it from GM.
everyone that loves american cars will agree with me. F***** imports. go back to your S***** countries!!! im a big fan of chevy but since all the american cars are going down hill ill support ford and the dodge.
Your Chevy's are imports. They're imported from Mexico where they are assembled. Here's an idea for GM, bring jobs back to the U.S and stop outsourcing to other countries. Then and only then, can you call yourself and American vehicle.
He didn't capitalize American or Chevy. Patriot my ass.
The alligator was laid off from Chrysler's plant yesterday and decided to hold an impromptu protest against foreign carmakers. When interviewed, he said, "I should have just taken a Sebring convertible, it would have kept customers from approaching the dealers."
05/31/09
[blog.caradvisorynetwork.com]
Just thought you'd like to know...
05/31/09
[www.akkamsrazor.com]
[noresize.com]
[bangshift.com]
Just thought you'd like to know.
05/31/09
Then Chrysler corporate would swoop in and suddenly find financial "issues" and pull the franchise leaving the dealership owners with inventory on hand. There are implied references made to indicate the dealer has done something illegal in spite of the fact there has been no illegal activity. The inventory would be tied up in probate and the dealership can't sell it. Meanwhile the dealership now has a huge debt incurred from expansion. Bankruptcy is about the only way out.
As to separate dealerships for the brands, who the hell can afford separate facilities for Chrysler, Dodge, and Jeep? UDMan states "Since part of my job deals with evaluating possible new dealers, as well as auditing existing dealers, I'm in the unique position to understand this process."
Sorry, but considering the consistent stories I have heard about from former dealers in multiple states, there may be more to this than meets the eye. Is UDMan presenting "the whole truth and nothing but" or just the true parts that are favorable to the company position?
05/31/09
I agree. Here in Detroit, the daily news is consumed with this issue. yet, nobody has been able to explain how closing dealers saves the manufacturers any money. Jim Press had a lengthy interview on one of the local radio stations about the matter and the only thing I got out of it was that marginal dealers can't hire the best people so they hurt the reputation of the manufacturer. But if these dealers can remain profitable, they can't be hurting that reputation too much. Catch the interview here. [www.wjr.com]
It seems to me that this is just another reason dreamed up by a bunch of egghead MBAs at the manufacturers to explain why American companies can't compete. "We have way more dealers than Toyota and Honda. THAT must be the reason we can't compete. Yeah, that's it."
05/31/09
About the Seperate Dealerships I talked about, there are a number of dealers who operate dual competing brands in the same building. I'll take a couple of examples I know of. There was (emphasis on was) a Cadillac Jaguar dealer in Hartford, operating under the same showroom. All the owner did was separate the showroom with a glass wall, and that was it. Neither GM or Ford (who owned Jaguar at the time) was happy about it, but they couldn't pull either franchise because of strong franchise laws. There were literally a dozen other dealership owners that promised to put up brand new separate facilities for each brand, following the manufacturers blueprints for square footage, decor, signage, and number of service bays.
Yes I did side with the manufacturer. Because of the strong franchise laws, a dealer didn't have to meet quotas, update facilities, or maintain adequate CSI. The only way they would lose their franchise is if they were criminally negligent, or lose their primary source of funding. After years of having the manufacturers ask politely to update their image, get a competing make out of the same facility, or sell a couple of more vehicles at the expanse of gross margins, the time has come due to the dealers that played hardball.
05/31/09
Each and every dealer usually has a minimum stocking level of cars. Lets use a round number like 10. Chrysler just eliminated around 800 dealers, so that will be around 8,000 cars that won't need further factory assistance to move, 8,000 less cars to pay the dealer holdback to, 8,000 less units that the captive floorplan company has to audit.
You also can reduce the number of field support personnel used to support these do nothing dealers, along with reducing the other support structures (less promotional crap to produce, reducing the number of trucks to service the dealers, and the costs go down from there.
With the money saved, you can increase the spiff levels to the strong dealers (spiff is a car term for promotional money or cash given to the dealers or the sales staff) to reach their targets, or better yet, to exceed their targets in stocking levels, and sales levels. Smaller dealers tend to hang on to gross margins, large dealers tend to make less per transaction. This is only the beginning anyway. Stay tuned
05/31/09
If the answer was no to all your done. If the answer was yes to one you might make it. If it's yes to all, your set, plus you get a GM franchise.
05/31/09
Conspiracy theorists are really somethin', regardless of party.
05/30/09
05/31/09
05/30/09
*sigh*
Let me try to lighten the mood.
What do you get when you cross a Chrysler with a Fiat?
A large car that won't start.
05/30/09
05/30/09
No this is happening because it has taken years to get rid of those dealers who wouldn't play by Chrysler's rule book (Not stocking cars, not selling enough units, selling more used than new, and not buying or selling out to other dealers to combine one Chrysler Jeep Dodge store) because of very strong local franchise rules.
I have it on good authority that GM may file for chapter 11 tomorrow, and then it will make public those 1,100 dealers than GM notified it no longer wants. I already know of a few GM dealers that won't have their franchise agreements in my local area renewed.
In the Hartford area (and surrounding inner suburbs) there is but one Chevrolet dealer remaining. We lost the following dealers: Cadillac (combined with Jaguar!), 2 Buick/Pontiac Dealers, a Chevrolet/Hummer/Buick dealer, 2 Saturn retailers, and a GMC Truck store. Actually, the economy has dictated most of these loses, as a Lincoln Mercury dealer, and a large Ford dealer has also closed.
05/30/09
Nope - naught to do with that.
05/30/09
05/30/09
Ooops! No you're not! Not no more! Uh-uh! No way, Jose! Done! Next!
(By the way, as much as I understand this complaint, how many dealerships are NOT mixed franchises anymore? I would think at least two to one are mixed over stand alone...???)
05/30/09
05/30/09
05/30/09
business model, and changes have to be made. Fiat knows it, the Federal government may/may not know it. Ok, they probably have no clue, but the poll numbers say it's a good idea!
Sorry if I jumped around a bit. Ah, well, we all can't be as good of a scribe as UDman. And that's one well-written analysis, sir.
05/30/09
05/30/09
I hope you all enjoy my continuing feature over at CarDomain called the Obscure Muscle Car Parking Lot, and while I'm shamelessly plugging away, I have my own collumn over at Rich Truesdell's excellent site, Automotive Traveler, appropriately called "Ramblings". Here's some recent posting in the column:
[www.automotivetraveler.com]
05/30/09
05/31/09
05/30/09
Nah, couldn't be.
05/30/09
At least those dealers will still have a franchise (the other brand) to sell, at least for now.
05/30/09
05/30/09
05/30/09
05/30/09
Your Chevy's are imports. They're imported from Mexico where they are assembled. Here's an idea for GM, bring jobs back to the U.S and stop outsourcing to other countries. Then and only then, can you call yourself and American vehicle.
He didn't capitalize American or Chevy. Patriot my ass.
05/30/09
05/30/09
05/30/09
05/30/09
*Runs away*
05/30/09
05/30/09
Buy American cars, support national health care... in Canada.
05/30/09
05/31/09
05/31/09
The dollars, somewhat as well, of course.
05/01/09
05/01/09