Chrysler and GM Dealerships

sucks2beme

The Ford F150 is heavily discounted around the Dallas area right now, along
with other trucks(other than Toyota). The few people I know buying
trucks are getting them due to big incentives. Like everyone else, I'm
not getting one because of the current climate. The job could go poof
at any time, and finding another tech job with decent pay is not going
to be easy. Killing the unions might drop $1500 off the price of a truck,
but if I'm unemployed, what good would that do? And Toyota lost their
*ss, too. No union there, but that didn't save them from a big downturn.
I can get an F150 for a hell of a lot less than a Toyota model, too.
Like Jstas, I've got older Fords in the driveway. And they're going to get
a lot older.

brettw22

shepx2 wrote: »

My wife is a director with Mary Kay, and her current company car is a Saturn Aura. I really like it. It rides nice; gets decent gas mileage. But, it's the little things about it that drive you nuts.

By FAR the worst thing about that car/Malibu is that triangle corner that pokes out from the B-Pillar to blend the arm rest into the pillar.....when I've had either the Malibu/Aura I get poked by that thing all the time.......HORRIBLE design on that.......

tonyb

steveinaz wrote: »

Blaming unions for the high cost of cars is like blaming the government for the high price of tobacco. They are a convenient target. RJ Reynolds hasn't dropped a cent off the price of their cigarettes to compensate for the rediculous sin taxes waged on tobacco---they love hiding behind the incorrect belief (read that: ignorance of many Americans) that it's the gubments fault. American trucks still pull down a HUGE profit--seen any HUGE sales on them through all of this? I didn't think so. It's all about the bottom-line baby.

Kinda,yes and no.....Unions definately have a role in the overall costs of a car.Tobacco?? Maybe you forgot the billions awarded,the lawyers they have to keep to defend themselves of current lawsuits.Can't imagine their profit margin being anywhere near what it used to be.Throw govt. taxes onto it,and I would say they do make a good target.Everyone's in buisness to make money,reduceing the price only opens the door for even more taxes,since that is the governments end game.Tax what you don't like out of existance.

Hillbilly61

sucks2beme wrote: »

I'm going to run mine into the dirt. The trade value on the truck
is nothing, so I've got nothing to lose by milking it out. Multiply that idea
out by 10 million and it's going to be a bad year for all things automotive.

You make a real interesting point here. Time Magazine recently had an article stating that whichever auto mfgrs make it through this severe downturn stands to make a huge pile of money during the 2010-2012 period. It's because people are holding on their vehicles, but will sooner or later will have to replace. Additionally, there will be less competition due to fewer dealers.

tonyb

Hillbilly61 wrote: »

You make a real interesting point here. Time Magazine recently had an article stating that whichever auto mfgrs make it through this severe downturn stands to make a huge pile of money during the 2010-2012 period. It's because people are holding on their vehicles, but will sooner or later will have to replace. Additionally, there will be less competition due to fewer dealers.

Not necessarily so.2010 seems a bit early for a rosey forcast for the auto industry.Besides,when people eventually have to buy another car,who says it will be a new one? I see a boom in the used car buisness.

venomclan

tonyb wrote: »

Not necessarily so.2010 seems a bit early for a rosey forcast for the auto industry.Besides,when people eventually have to buy another car,who says it will be a new one? I see a boom in the used car buisness.

I would say 2012 maybe. The housing market is predicted to bottom in 2011. Everything is tied to housing and lending.
Venom

sucks2beme

I must be old. I remember when it was all tied to manufacturing.
Maybe being a country of consumers is a bad thing?

polktiger

sucks2beme wrote: »

I must be old. I remember when it was all tied to manufacturing.
Maybe being a country of consumers is a bad thing?

Clearly you are not an enlightened econmonics sevant;)
Don't you realize the rest of the world WANTS to work for pennies to provide us with cheep goods. All we need to do is "consult" and advertise. Certainly the rest of the world will be happy being our servants.

sucks2beme

And we would be happy to ship all this worthlees green colored paper
to them in trade for their effots.

Hillbilly61

venomclan wrote: »

I would say 2012 maybe. The housing market is predicted to bottom in 2011. Everything is tied to housing and lending.
Venom

The housing market drives the big finance train, but not necessarily for vehicle purchases. Plenty of folk buy new cars, but rent an apartment. In the same vein, many people lease new vehicles. In either event, it results in a new car sale to the mfgr.

obieone

Looked thru 3 pages, and didn't see the MATH involved with this decision by Chrysler.

3000 dealerships x 20+/- employees ea.=60,000 UNEMPLOYED people. Add to that, the suppliers, tire co.'s, etc.
I thought this whole bailout was to prevent this.

Oh, BTW, the UAW has 55% ownership, without investing a dime!!! And the U.S. taxpayer only has 8%, after forking over $4 BILLION.

Hillbilly61

obieone wrote: »

Oh, BTW, the UAW has 55% ownership, without investing a dime!!! And the U.S. taxpayer only has 8%, after forking over $4 BILLION.

Their dime is invested. Wait 'till they start acting like owners and telling the members that the benefits the union got them is history.

WilliamM2

Looks like the government is financing GM, so that they can outsource even more jobs.

http://apnews.myway.com/article/20090514/D985PEDO0.html

http://online.wsj.com/article/SB124224047430416183.html

shack

obieone wrote:

Looked thru 3 pages, and didn't see the MATH involved with this decision by Chrysler.

3000 dealerships x 20+/- employees ea.=60,000 UNEMPLOYED people. Add to that, the suppliers, tire co.'s, etc.
I thought this whole bailout was to prevent this.

The math is.....Chrysler is shutting down 800-900 dealership out of thier 3,200 existing dealerships. Their research tells them that 50% of their dealers sell 90% of their cars. If these are the poor performing dealerships then they will still be selling almost as many cars with much less overhead costs to them. Few parts suppliers will be affected. Probably only the sales and clerical workers will lose their jobs. Good mechanics should be able to find a job just about anywhere. These dealerships probably weren't making much money anyway and the remaining dealers may pick up some of the slack and be more profitable.

The purpose of the bailout was to keep the company from closing it's doors for good and keeping as many jobs as possible...not maintain it's current level of production if the cars aren't selling. The govt. MANDATED that they shrink the business to a profitable level. That is what they are attempting to do.

WilliamM2

My Grandfather's dealership (Jeep, GMC, Pontiac, Buick, Audi) just got notified today that they are one of the dealers losing their franchise. It's not because they were poor performing, but because Jeep is the only Chrysler product they sell. They have been selling Jeeps for over 35 years, long before Chrysler was invovled.

They are also losing Pontiac, so not good news at all.

tonyb

shack wrote: »

The math is.....Chrysler is shutting down 800-900 dealership out of thier 3,200 existing dealerships. Their research tells them that 50% of their dealers sell 90% of their cars. If these are the poor performing dealerships then they will still be selling almost as many cars with much less overhead costs to them. Few parts suppliers will be affected. Probably only the sales and clerical workers will lose their jobs. Good mechanics should be able to find a job just about anywhere. These dealerships probably weren't making much money anyway and the remaining dealers may pick up some of the slack and be more profitable.

The purpose of the bailout was to keep the company from closing it's doors for good and keeping as many jobs as possible...not maintain it's current level of production if the cars aren't selling. The govt. MANDATED that they shrink the business to a profitable level. That is what they are attempting to do.

I can agree to the purpose of the bailout,not the bailout itself mind you,but I have a question with your math.If 50% of the dealerships sold 90% of the cars,that means the other 50% sold only 10%.Now,how the hell did those 50% keep the doors open with only a 10% piece of the pie? Something is not adding up.

WilliamM2

tonyb wrote: »

I can agree to the purpose of the bailout,not the bailout itself mind you,but I have a question with your math.If 50% of the dealerships sold 90% of the cars,that means the other 50% sold only 10%.Now,how the hell did those 50% keep the doors open with only a 10% piece of the pie? Something is not adding up.

His numbers are off. "Chrysler has said that 25 percent of its U.S. dealers account for half of the company’s sales."

http://www.businessweek.com/autos/autobeat/archives/2009/05/its_official_ch_1.html?chan=top+news_top+news+index+-+temp_top+story

But to answer your question, usually dealers sell more than one brand, and most make more money selling used cars, and in their service departments, than selling new cars. That's how they keep the doors open. But it's the new cars that bring the customers in to shop, even if they end up buying used.

Systems

Well, my little one horse town dealership is still in business. Supposedly the dealers that were getting shut down got the notice via UPS yesterday morning.

polktiger

shack wrote: »

The math is.....Chrysler is shutting down 800-900 dealership out of thier 3,200 existing dealerships. Their research tells them that 50% of their dealers sell 90% of their cars. If these are the poor performing dealerships then they will still be selling almost as many cars with much less overhead costs to them. Few parts suppliers will be affected. Probably only the sales and clerical workers will lose their jobs. Good mechanics should be able to find a job just about anywhere. These dealerships probably weren't making much money anyway and the remaining dealers may pick up some of the slack and be more profitable.

These numbers are not entirely correct. I have one client that lost 2 of his 4 dealerships. One of thos was a Dodge only dealer and had the was one of the highest performing dealerships in the country for its demographic market. Until last year, it typically sold 600 - 700 vehicles a year (Dodge only) more than double the average for a Chrysler dealer with all three brands available.

Locally it had more to do with dealership location (traffic counts) and whether the dealer was one of the "big guys." I am still looking, but the only mega dealer that I am aware of that lost any dealerships was Sonic Automotive, and it only lost 1. I know Hendrick did not lose any. I am still looking for Asbury, AutoNation, Group 1, etc., but I have not heard of any.

Marty913

According to the local "newspaper" (fish wrapper at best), our small town is losing one dealer (out of 3). The article claims 789 dealers were notified which account for 14% of overall sales. Some of the dealers sell less than 100 cars per year. I would imagine the other two remaining dealers will easily pick up the 100 or so cars the closing dealer sells - and probably some of the 20 employees. The dealer being closed owns 4 other franchise operations (GM, Nissan, BMW, and Mazda) so he'll probably keep most of the rest.

shack

WilliamM2 wrote: »

His numbers are off. "Chrysler has said that 25 percent of its U.S. dealers account for half of the company’s sales."

http://www.businessweek.com/autos/autobeat/archives/2009/05/its_official_ch_1.html?chan=top+news_top+news+index+-+temp_top+story

My numbers aren't wrong. Chrysler may indeed have said that for the business week article, and it may be true...but the math still works for what I posted...which came from:

According to the Bankruptcy Court motion filing as reported by the AP:

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.

That document will be a public record at some point and easily verifyable.

polktiger wrote:

These numbers are not entirely correct.

They are Chrysler's figures. You need to take that up with them if you think they are wrong. I'm sure the bankruptcy court will want some verification before approving the motion.

From the Wall Street Journal:

Many of Chrysler's 3,181 dealers sell too few new vehicles to make money. About half of the dealers being closed sold fewer than 100 new vehicles in 2008, Chrysler Vice Chairman Jim Press said.

In 2008, Chrysler sold an average of 303 vehicles per store. Toyota Motor Corp. dealerships, meantime, sold 1,292 cars and trucks on average, while Honda Motor Co. retailers sold 1,030, according to Chrysler court filings.

Again, based on documents supporting the motion they filed with the bankruptcy court.

venomclan

Hillbilly61 wrote: »

The housing market drives the big finance train, but not necessarily for vehicle purchases. Plenty of folk buy new cars, but rent an apartment. In the same vein, many people lease new vehicles. In either event, it results in a new car sale to the mfgr.

Actually the big finance train drives the housing markets and every other large consumable. Most who rent apartments live in areas with better public transportation, and thus do not need vehicles as much as more rural home owners. Equity and/or free credit= confidence and sales.

obieone wrote: »

Looked thru 3 pages, and didn't see the MATH involved with this decision by Chrysler.


Oh, BTW, the UAW has 55% ownership, without investing a dime!!! And the U.S. taxpayer only has 8%, after forking over $4 BILLION.

The UAW is already trying to sell their stake, which was to cover their VEBA. They would rather have the money than risk it on the company. They also signed a no-strike clause until 2015 for Chrysler, thus killing all their power. They realize that the parasite cannot survive as the host as well. Better to suck them dry and leave the carcass than to go down with the ship...
Venom

polktiger

shack wrote: »

My numbers aren't wrong. Chrysler may indeed have said that for the business week article, and it may be true...but the math still works for what I posted...which came from:

According to the Bankruptcy Court motion filing as reported by the AP:



That document will be a public record at some point and easily verifyable.



They are Chrysler's figures. You need to take that up with them if you think they are wrong. I'm sure the bankruptcy court will want some verification before approving the motion.

From the Wall Street Journal:



Again, based on documents supporting the motion they filed with the bankruptcy court.

Shack - I know where you got the numbers, I read them too, and I was not attacking you. I just know what is being made public is not the whole story. Low volume I am sure is the case for some of the 789. But it is not the whole story. Not all these dealers were low volume. I personally know dealerships that were closed that were obliterating those average sales numbers and have so much cash and paid off real estate that finance was not an issue either. There is more to this story than is being made public at this time. Like I said, of the 100+ dealership mega dealers, I only see 1 franchise that was lost, and it was a Sonic Automotive dealership.

shack

polktiger wrote:

Shack - I know where you got the numbers, I read them too, and I was attacking you.

Let's hope that was a typing error...if not then F you!

We lost 3 of 4 dealerships in this town. I know two of them personally and we bought a van from both of them in years past. I like them but there is no way we needed this many dealers. The real volume dealer survived and will pick up all the business and will do even better. (Chrysler's plan).

The third has many other lines (The only local BMW dealership) and was primarily a low volume Jeep/Chrysler store. They will be better off in the long being able to shed an unprofitable line, concentrating on their other stores.

Like the Wall Street Journal indicated...Chryler is wanting get to point where most of their dealerships the mega-volume stores (like Toyota and Honda). According to the WSJ even after these dealerships close, Chrysler may still have too many.

shack

I see the edit...too late.

I never take any of this **** internet stuff too serious...so no big deal.

polktiger

shack wrote: »

I see the edit...too late.

I never take any of this **** internet stuff too serious...so no big deal.

I was typing too fast and hit post before proofing.

WSJ really should work harder on their articles - Honda and Toyota sell 1200 cars per dealership, sure they have fewer dealers, they also have mass appeal and higher perceived quality. Some dealers are poor car salesmen, but it is also a little easier to sell an Accord or Camry than it is a Sebring.

heiney9

The whole point I take from the WSJ article is the fact that Toyota can sell 1200 cars per dealer because there are less dealers...............which is exactly waht GM and Chrysler need to do............reduce the number of dealers. It's ridiculous to have 6 dealers to service a 20 mile radius of a population of less than 500,000. We are losing 3 dealers in our area which I just described. It's sad about the job loss, but something has to be done. We have a Chrysler plant (Belvidere) just 20 miles from here.....we still don't need 6 dealerships for the per capita population.

Guess what there is 1 Toyota dealership in the same area. Hmmmmmm.......

dpowell

ohskigod wrote: »

.....higher reliability ratings than the Camry and doesn't scream "I bought a boring car because I'm a Nadless conformist" either.

They have their throngs of nadless conformists lined up to buy their cars. That's how they survive!

heiney9

dpowell wrote: »

They have their throngs of nadless conformists lined up to buy their cars. That's how they survive!

We are all consumers and we have choices...........rational and irrational decisions are made every minute. Heinz or Delmonte Ketchup, Sketchers or Columbia shoes, Nike or Adidas, Coke or Pepsi, Chrysler or Toyota, Honda or Ford, Wendy's or McDonalds, Starbucks or Dunkin Donuts, Bridgestone or Firestone, Mobil 1 or Quaker State, Fed Ex or UPS.......and on and on.

It's about choices and we all have our reasons, rational or irrational. Has nothing whatsoever to do with not having nads or being a conformist. FTR, I don;t buy Toyota or Honda either, I buy Volkswagen and Audi.

H9

wingnut4772

Ricardo wrote: »

Ford, Honda, Chevy, Toyota, BMW, Dodge.......

Polk, B&W, Tyler, Magnepan, Boston, Dynaudio........

MIT, Audioquest, Signal, Canare, Nordost......

Blondes, Brunettes, Redheads, Asians.......

Mexican, Italian, Creole, Chinese, Junk......


And on and on.

dpowell wrote: »

Dell, HP, IBM, Packard Bell, eMachines.......

Adcom, Outlaw, B&K, Cinenova, Sunfire, Emotiva.......

We didn't start the fire.....