Democrats versus Republicans

[craigimass]

Originally Posted by Selkirk

Somehow, the government arrived at the conclusion that part of the problem was that there were TOO MANY dealers. "Yeah..We'll just make 'em close up all those dealers - the ones that buy cars and try to sell 'em - and that'll make the car companies more efficient".....WTH??!!

Uh, let me guess. You're in retail, right?

Look all around the country. Why are companies closing up a certain percentage of their stores?

Ok, I'll answer that. They were used to a certain level of sales - which then pays a certain level of overhead. There were enough customers to justify letting all the dealers of the same brand fighting among each other for each sale.

BUT, what happens then.....when there are not enough sales, nor enough profits, nor enough financing.....to support that dealer network.

YOU CLOSE A BUNCH OF OUTLETS.

It's just business, it's not a religion. If you don't have sales, you don't have outlets - period.

So, I assume you also think it is a bad move for companies in trouble to PAY OFF THOUSANDS OF WORKERS. After all, following your logic....WTH. Why would any company that wants to succeed....downsize?

(Oh, I was in retail for 20 years......successfully, luckily)

[OsmundL]

Guys, I have to be excused. In 10 minutes our National Day starts here, and right now the finals of the European Melody Grand Prix are voted, and Norway looks like a clear winner. Perfect birthday.

I'll be back.

[craigimass]

Originally Posted by cardiacpaul

Got any more? or am I being smarmy

You are definitely being smarmy, whatever that is.....

However, if you fail to see the TRILLIONS in dollars of COMMERCIAL trade empowered by the interstate highway system, then far be it from me to try to educate you on that.

If you fail to see that New York, London, Tokyo and most other major centers of COMMERCIALISM could not exist without public transportation, then I also would have a tough time pointing it out.

And, if you fail to see the value of GPS, Cable TV, Telephone and other communications....just a tiny part of the COMMERCIALISM empowered by the space program...yes, that would be a tough one to point out also.

[Selkirk]

Originally Posted by craigimass

Uh, let me guess. You're in retail, right?

Look all around the country. Why are companies closing up a certain percentage of their stores?

Ok, I'll answer that. They were used to a certain level of sales - which then pays a certain level of overhead. There were enough customers to justify letting all the dealers of the same brand fighting among each other for each sale.

BUT, what happens then.....when there are not enough sales, nor enough profits, nor enough financing.....to support that dealer network.

YOU CLOSE A BUNCH OF OUTLETS.

It's just business, it's not a religion. If you don't have sales, you don't have outlets - period.

So, I assume you also think it is a bad move for companies in trouble to PAY OFF THOUSANDS OF WORKERS. After all, following your logic....WTH. Why would any company that wants to succeed....downsize?

Evidently you do not know that car dealerships are not owned by the manufacturers. They are owned by guys like you and me who buy everything - everything, I'm saying; training, cars, and all - from the manufacturer.

[craigimass]

Originally Posted by Selkirk

Evidently you do not know that car dealerships are not owned by the manufacturers. They are owned by guys like you and me who buy everything - everything, I'm saying; training, cars, and all - from the manufacturer.

Evidently I 100% know that as I have friends who are Honda and Nissan dealers. But obviously YOU know that most of the cars sitting on the lot are financed by the manufacturer and that the dealer could not exist without the long arm of the manufacturer.

Not that any of that has anything to do with the point. If MacDonalds is not selling enough hamburgers, there will be stores closed...whether they are company-owned or privately owned.

Or, in more concise terms, if the market cannot support more than "x" vendors of a product - a scenario we can call "critical mass", then there must be adjustments.

To be even more clear, you are in effect arguing the same "side" that says "we have to protect all those workers and those plants that make the cars and the parts". No, if you and I don't buy the cars, there is no need for anyone to make them!

If the dealers are not selling cars - and they are not - then there is no need for the dealers. Retail and business largely are based on the law of the jungle. If you don't hunt, you don't get dinner. Period.

[craigimass]

Originally Posted by cardiacpaul

BUT, most of the dealers that are having their dealer agreements voided are private companies, mom and pop shops with less than 50 employees. AND profitable. .

Most of them are profitable and not behind in their floor planning?
Could you provide a link?
We have seen dozens of dealers just in the local area close up voluntarily. Yeah, mom and pop shops.

I'm not privy to the inside data on car dealers, but the fact that all of them have empty showrooms would seem to point to little or no profits and problems with paying for their vehicles.

I think some reading may be in order for you guys:
"Among them are 470 dealerships that sell Saturns, Saabs and Hummers. GM plans to sell or shut down those brands."

Hmmm....no more brand, no more dealers....that's not rocket science.

"GM said the 1,100 dealerships to be cut represent 18% of its network but produced just 7% of its sales last year. Nearly 500 of them sell fewer than 35 new GM vehicles a year"

Hmmm.....less than 35 vehicles per year? And a tiny percentage of their sales?

I really don't get it. The same folks who cheer when 1/2 the work force gets laid off - then moan when there are NOW FEWER VEHICLES TO SELL AS A RESULT OF THAT.

At least be consistent. I know that neither can be avoided. That is, the jobs are as good as lost and so are the dealerships. With or without government help, GM is/was toast. So are most of the dealers. The government thing may help, or it may just string out the inevitable. Either way, the result is less dealers. There is NO scenario where you can close plants, get rid of the work force, sell 1/2 as many vehicles and maintain the same dealer network...none.

Oh well, too simple I guess.

[US27inKS]

Because business is business, this isn't a hard problem to solve. Find the dealerships who are behind on their floor plan, not meeting sales quotas etc, and refuse renewal of their dealership agreement PER THEIR EXISTING DEALERSHIP AGREEMENT CONTRACT. There is no need for the government to step in and dictate how many dealerships will close and in which markets. Let the existing contracts be enforced and be done with it. Let business be a business and keep the politics out of it. Next thing we know there will be congressmen pressuring for dealerships to stay open in their district just like a military base. What a crock of crap.

Originally Posted by craigimass

Evidently I 100% know that as I have friends who are Honda and Nissan dealers. But obviously YOU know that most of the cars sitting on the lot are financed by the manufacturer and that the dealer could not exist without the long arm of the manufacturer.

Not that any of that has anything to do with the point. If MacDonalds is not selling enough hamburgers, there will be stores closed...whether they are company-owned or privately owned.

Or, in more concise terms, if the market cannot support more than "x" vendors of a product - a scenario we can call "critical mass", then there must be adjustments.

To be even more clear, you are in effect arguing the same "side" that says "we have to protect all those workers and those plants that make the cars and the parts". No, if you and I don't buy the cars, there is no need for anyone to make them!

If the dealers are not selling cars - and they are not - then there is no need for the dealers. Retail and business largely are based on the law of the jungle. If you don't hunt, you don't get dinner. Period.

[craigimass]

The dealer were informed as per legal contracts....that in 2010 their contracts would not be renewed. Independent of that, if (when) the company enters bankruptcy, they are allowed to screw their employees, their dealers and their customers and vendors. That is the law.

As to these dealers - again, pretty simple:
"Years of declining sales have left both GM and Chrysler with many more dealerships than they need. As a result, their dealers often compete with each other for customers, hurting their profits.
Most of the GM dealers selected are "hurting, losing money and in danger of going out of business anyway," Mr. LaNeve told reporters. "It's a move that people could argue should have been taken years ago."

Hmmm - that sounds sorta like what I said.

[craigimass]

"Fewer but Healthier?

The company believes that having fewer, healthier dealers will help it better compete with foreign-based rivals such as Toyota Motor Corp. and Honda Motor Co., which tend to have newer, better financed stores in more attractive locations.

By limiting the number of retailers, those companies ensure that each has a better shot at being profitable."

From the Wall Street Journal
GM to Close 1,100 Dealerships - WSJ.com

[craigimass]

Originally Posted by cardiacpaul

Lets take a look at this from the other side of the fence.

I'm not behind in my floor plan, I'm meeting the goals that you said I had to (even if it is 3 cars a month), and service approval rating is within your acceptable range.

I've held up my end, in some cases for more than 4 decades.....
If the company chose to not renew, thats one thing, understandable, voiding before the renewal date? not going to be pretty.

Hah, you might be more of a bleeding heart that I am!

From a human perspective, your point makes perfect sense. But from a legal and business one, it does not.

We could apply your exact words to a hard worker whose father worked in the GM plant - and his father too. They gave their entire lives to the firm. They made good money and took out a mortgage on a home. Then they took out a second mortgage to put their kids through college, so the kids would not have to work on the assembly line.

BUT, now, they are out of work. They and tens or hundreds of thousands...or MILLIONS of others. They can't pay their mortgage or their second mortgage. They can't pay their credit cards off, because they have no income.

We could apply the same words to the parts suppliers of GM, who now have no parts to supply because there are no cars being built.

The sad fact (or grim reality) of business is this. Bankruptcy or failure of a business clears the way for a complete screwing of ALL the people involved, from the stockholders to the employees to the pensions and suppliers. ALL OF THEM.

I'm not saying this is the way it should be. My brother worked for Lucent for 20+ years and built up a pension, health care and other benefits. Then they, like most other corporations in this country, renegotiated and used fine print to get out of most of their obligations.

I guess the basics of this are "you can't get blood from a stone". But we all assumed that pensions were somewhat safe because they were separate. Turns out they were invested in the same company stock, ongoing operations and stock market that we all were.

In my industry, we recently had one of the largest manufacturers - the TOP brand name - get bought and sold a couple of times. The newest entity which owns them has REFUSED to honor any warranties on stuff sold over a year ago (the products have 3-5 year warranties).

Is that fair? Of course not. But I didn't make the laws. Pointing out the way things are and agreeing with them are two separate things.

Behind all of this crap is really one thing. We went too far (maybe not you and I, but WE as an economy) down the road of blatant consumerism and consumption without keeping any controls on the beast. Like the proverbial "Giving Tree" (we all read that, right?), we have taken too much from something that does not have anymore to give. The result is pain. The pain does not fall where it should (if Justice and Fairness was the organizing principle of the universe).

In the end, Government should be a tool which attempts to provide Justice and Fairness - but it is always an imperfect one. At the same time, the Barbarian way will be vastly worse!

Just like we can blame everything on Clinton or Bush, we can also (and more accurately) blame things on the fact that GM and the American car makers fought HARD for the last 30 years against ANY increase in CAFE standards. Instead, they broke the spirit of the regulations (SUVs were only allowed because they called them trucks)...and actually brought the average MPG down. They failed to innovate.

We are seeing the results. But at the same time, if they would not have fought government tooth and nail when government was trying to regulate them (better MPG, etc.), they might be in a better position.

I feel for the dealers...but more for the employees of the dealers, suppliers and car makers...because there are vastly more of them! And, if the dealer had any intelligence, they would have stashed away some other money over the decades. The suppliers and employees often don't have that option. They have unemployment insurance and that is it.