How will dealers 'dodge' teh ax?

  • Thread starter 'Teh' Fortisque Flatiron
  • Start date

T

'Teh' Fortisque Flatiron

Chrysler aims to close 789 dealerships
Move could cost cities around the country jobs and tax revenue
The Associated Press
NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its
3,200 U.S. dealerships by early next month, saying in a bankruptcy court
filing Thursday that the network is antiquated and has too many stores
competing with each other.
The company, in a motion filed with the U.S. Bankruptcy Court in New
York, said it wants to eliminate 789 dealerships by June 9. Many of the
dealers' sales are too low, the automaker said. Just over 50 percent of
dealers account for about 90 percent of the company's U.S. sales, the
motion said.
Dealers were told Thursday morning through United Parcel Service letters
if they would remain or be eliminated. The move, which the dealers can
appeal, is likely to cause devastating effects in cities and towns
across the country as thousands of jobs are lost and taxes are not paid.
Chrysler spokeswoman Kathy Graham would not comment other than to say
the company will notify dealers before speaking publicly. A hearing is
scheduled for June 3 in U.S. Bankruptcy Court in New York to determine
whether to approve Chrysler's motion.
Judges often rely on companies in bankruptcy to help determine what is
in their best business interest, such as the closure of dealerships or
cancellation of contracts.
Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he
found out that Chrysler plans to get rid of his dealership when he
opened his UPS letter Thursday morning.
"Right now I'm processing the information," he said shortly after
reading the letter. "I'm sure I'm going to get with my partner and we'll
decide what to do from here."
The dealership, in a city of about 10,000 near Springfield, Mo., is
involved in the community, sponsoring sports teams and even buying
championship rings for the Ozark High School girls basketball team when
it won the state championship several years ago, Burk said.
"If you're a good-sized business, kind of by default you're involved a
lot," he said.
Chrysler dealerships aren't the only ones scheduled to get bad news this
week. General Motors Corp. says it is notifying 1,100 dealers that it
will not renew their franchise agreements when they expire at the end of
September of 2010.
In its motion, Chrysler said it has many dealerships that sell one or
two of its brands, with Chrysler-Jeep dealerships competing against
Dodge dealers as well as other automakers' stores across the country.
"In addition, as suburbs grew and the modern interstate system continued
to evolve, longstanding dealerships no longer were in the best or
growing locations," the company said in its filing. "Many rural
locations also served a diminishing population of potential consumers.
Some dealership facilities became outdated. Other locations faced
declining traffic count and declining populations."
Chrysler said in its filing that dealers are not competitive enough with
foreign brands. Chrysler sold an average of 303 vehicles per dealer in
2008, according to its filing. By contrast, Honda Motor Co. sold about
1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300
per dealer.
Chrysler said its dealer network "needs to be reduced and reconfigured
in a targeted manner to strengthen the network and dealer profitability
and to achieve optimal results for the dealers and consumers."
Chrysler has received $4 billion in federal loans and has been operating
in bankruptcy protection since April 30. Its sales this year are down 46
percent compared with the first four months of last year and it reported
a $16.8 billion net loss for 2008.
General Motors has a June 1 government-imposed deadline to come up with
a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy
protection.
Dealers around the country are gearing up for a battle against the two
automakers, but it's not clear how much power they'll have to save
themselves. Legal battles with the dealers could delay
Chrysler’s exit from a government-forced bankruptcy within the
time frame of 30 and 60 days projected by the Obama administration.
Some Chrysler dealers who fear they will lose their franchises have
formed a committee and hired lawyers. In conjunction with the National
Automobile Dealers Association, a trade group, the committee has asked
Chrysler dealers to contribute $4,000 each to a legal fund, according to
news reports.
 
P

PeterD

Chrysler aims to close 789 dealerships
Move could cost cities around the country jobs and tax revenue
...
All I can say is I'm glad that Chrysler did axe the crappy local
dealer at least! That's right, the dealer I got my Dodge Ram from is
on the block, and I'm glad.

Basically they screwed up so many things that I ended up paying for
warranty repairs, their fault, and their attitude was "Screw you, we
can do whatever we want..."

Well, Mr. Local Dealer, enjoy...

Oh, and the dealer I now go to (only a few minutes further away: they
are not on the list, and I don't expect 'em to be! Great. One crappy
dealer gone.
 
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E

Electrician

Chrysler aims to close 789 dealerships
Move could cost cities around the country jobs and tax revenue
The Associated Press
NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its
3,200 U.S. dealerships by early next month, saying in a bankruptcy court
filing Thursday that the network is antiquated and has too many stores
competing with each other.
The company, in a motion filed with the U.S. Bankruptcy Court in New
York, said it wants to eliminate 789 dealerships by June 9. Many of the
dealers' sales are too low, the automaker said. Just over 50 percent of
dealers account for about 90 percent of the company's U.S. sales, the
motion said.
Dealers were told Thursday morning through United Parcel Service letters
if they would remain or be eliminated. The move, which the dealers can
appeal, is likely to cause devastating effects in cities and towns
across the country as thousands of jobs are lost and taxes are not paid.
Chrysler spokeswoman Kathy Graham would not comment other than to say
the company will notify dealers before speaking publicly. A hearing is
scheduled for June 3 in U.S. Bankruptcy Court in New York to determine
whether to approve Chrysler's motion.
Judges often rely on companies in bankruptcy to help determine what is
in their best business interest, such as the closure of dealerships or
cancellation of contracts.
Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he
found out that Chrysler plans to get rid of his dealership when he
opened his UPS letter Thursday morning.
"Right now I'm processing the information," he said shortly after
reading the letter. "I'm sure I'm going to get with my partner and we'll
decide what to do from here."
The dealership, in a city of about 10,000 near Springfield, Mo., is
involved in the community, sponsoring sports teams and even buying
championship rings for the Ozark High School girls basketball team when
it won the state championship several years ago, Burk said.
"If you're a good-sized business, kind of by default you're involved a
lot," he said.
Chrysler dealerships aren't the only ones scheduled to get bad news this
week. General Motors Corp. says it is notifying 1,100 dealers that it
will not renew their franchise agreements when they expire at the end of
September of 2010.
In its motion, Chrysler said it has many dealerships that sell one or
two of its brands, with Chrysler-Jeep dealerships competing against
Dodge dealers as well as other automakers' stores across the country.
"In addition, as suburbs grew and the modern interstate system continued
to evolve, longstanding dealerships no longer were in the best or
growing locations," the company said in its filing. "Many rural
locations also served a diminishing population of potential consumers.
Some dealership facilities became outdated. Other locations faced
declining traffic count and declining populations."
Chrysler said in its filing that dealers are not competitive enough with
foreign brands. Chrysler sold an average of 303 vehicles per dealer in
2008, according to its filing. By contrast, Honda Motor Co. sold about
1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300
per dealer.
Chrysler said its dealer network "needs to be reduced and reconfigured
in a targeted manner to strengthen the network and dealer profitability
and to achieve optimal results for the dealers and consumers."
Chrysler has received $4 billion in federal loans and has been operating
in bankruptcy protection since April 30. Its sales this year are down 46
percent compared with the first four months of last year and it reported
a $16.8 billion net loss for 2008.
General Motors has a June 1 government-imposed deadline to come up with
a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy
protection.
Dealers around the country are gearing up for a battle against the two
automakers, but it's not clear how much power they'll have to save
themselves. Legal battles with the dealers could delay
Chryslerâ?Ts exit from a government-forced bankruptcy within the
time frame of 30 and 60 days projected by the Obama administration.
Some Chrysler dealers who fear they will lose their franchises have
formed a committee and hired lawyers. In conjunction with the National
Automobile Dealers Association, a trade group, the committee has asked
Chrysler dealers to contribute $4,000 each to a legal fund, according to
news reports.

I guess what I don't understand is why closing dealerships is going to help
Chrysler? My understanding is that Chyrsler doesn't subsidize the dealer,
they just sell to them and reimburse them for warranty service. So doesn't
less dealers mean less possible sales? It seems the dealership itself should
decide whether they can afford to continue to sell Chysler products. But
maybe I'm missing something since GM is doing the same thing.
 
T

Tony D.

Electrician said:
Chrysler aims to close 789 dealerships
Move could cost cities around the country jobs and tax revenue
The Associated Press
NEW YORK - Chrysler LLC wants to eliminate roughly a quarter of its
3,200 U.S. dealerships by early next month, saying in a bankruptcy court
filing Thursday that the network is antiquated and has too many stores
competing with each other.
The company, in a motion filed with the U.S. Bankruptcy Court in New
York, said it wants to eliminate 789 dealerships by June 9. Many of the
dealers' sales are too low, the automaker said. Just over 50 percent of
dealers account for about 90 percent of the company's U.S. sales, the
motion said.
Dealers were told Thursday morning through United Parcel Service letters
if they would remain or be eliminated. The move, which the dealers can
appeal, is likely to cause devastating effects in cities and towns
across the country as thousands of jobs are lost and taxes are not paid.
Chrysler spokeswoman Kathy Graham would not comment other than to say
the company will notify dealers before speaking publicly. A hearing is
scheduled for June 3 in U.S. Bankruptcy Court in New York to determine
whether to approve Chrysler's motion.
Judges often rely on companies in bankruptcy to help determine what is
in their best business interest, such as the closure of dealerships or
cancellation of contracts.
Don Burk, co-owner of Heritage Chrysler Jeep in Ozark, Mo., said he
found out that Chrysler plans to get rid of his dealership when he
opened his UPS letter Thursday morning.
"Right now I'm processing the information," he said shortly after
reading the letter. "I'm sure I'm going to get with my partner and we'll
decide what to do from here."
The dealership, in a city of about 10,000 near Springfield, Mo., is
involved in the community, sponsoring sports teams and even buying
championship rings for the Ozark High School girls basketball team when
it won the state championship several years ago, Burk said.
"If you're a good-sized business, kind of by default you're involved a
lot," he said.
Chrysler dealerships aren't the only ones scheduled to get bad news this
week. General Motors Corp. says it is notifying 1,100 dealers that it
will not renew their franchise agreements when they expire at the end of
September of 2010.
In its motion, Chrysler said it has many dealerships that sell one or
two of its brands, with Chrysler-Jeep dealerships competing against
Dodge dealers as well as other automakers' stores across the country.
"In addition, as suburbs grew and the modern interstate system continued
to evolve, longstanding dealerships no longer were in the best or
growing locations," the company said in its filing. "Many rural
locations also served a diminishing population of potential consumers.
Some dealership facilities became outdated. Other locations faced
declining traffic count and declining populations."
Chrysler said in its filing that dealers are not competitive enough with
foreign brands. Chrysler sold an average of 303 vehicles per dealer in
2008, according to its filing. By contrast, Honda Motor Co. sold about
1,200 vehicles per dealer, while Toyota Motor Corp. sold nearly 1,300
per dealer.
Chrysler said its dealer network "needs to be reduced and reconfigured
in a targeted manner to strengthen the network and dealer profitability
and to achieve optimal results for the dealers and consumers."
Chrysler has received $4 billion in federal loans and has been operating
in bankruptcy protection since April 30. Its sales this year are down 46
percent compared with the first four months of last year and it reported
a $16.8 billion net loss for 2008.
General Motors has a June 1 government-imposed deadline to come up with
a viable restructuring plan or join Chrysler in Chapter 11 bankruptcy
protection.
Dealers around the country are gearing up for a battle against the two
automakers, but it's not clear how much power they'll have to save
themselves. Legal battles with the dealers could delay
Chryslerâ?Ts exit from a government-forced bankruptcy within the
time frame of 30 and 60 days projected by the Obama administration.
Some Chrysler dealers who fear they will lose their franchises have
formed a committee and hired lawyers. In conjunction with the National
Automobile Dealers Association, a trade group, the committee has asked
Chrysler dealers to contribute $4,000 each to a legal fund, according to
news reports.

I guess what I don't understand is why closing dealerships is going to help
Chrysler? My understanding is that Chyrsler doesn't subsidize the dealer,
they just sell to them and reimburse them for warranty service. So doesn't
less dealers mean less possible sales? It seems the dealership itself should
decide whether they can afford to continue to sell Chysler products. But
maybe I'm missing something since GM is doing the same thing.
Because it means intense competition that makes prices fall, unsold
inventories,etc. And the dealers are not exactly totally unconnected to
the mfg. There are many financial intertwinings.
The avg Honda or Toyota dealer sells 1300 cars/yr, Chrysler is like 308.
 
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L

lansing

Many point out the numbers of sales of Honda to Chrysler ??? Could the
reason for that be the products Chrysler sells that lost them sales ??
Nothing loves gas and repairs like a Chrysler rig...

Lansing
 

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