Chrysler (Fiat) To Slash 800 Dealers On Thursday
The AP (via Yahoo!) reports that Chrysler will ask Judge Gonzalez to cancel “at least” 800 dealer franchise agreements on Thursday. The news comes from lawyers of Cincinati firm Squire, Sanders & Dempsey, who are organizing opposition to the move. Automotive News [sub] has more on the effort, reporting that the National Automobile Dealers Association is soliciting $4,000 contributions from members to create a legal defense fund. Also, just because a dealer doesn’t get the axe on Thursday doesn’t mean they’re out of the woods yet. Mother Fiat is sees dealer cuts as business item number one for its new Chrysler division, and Thursday’s cuts are being called “preliminary.” Dealer cuts “won’t be a huge catastrophic number,” Jim “It’s Always Sunny In Auburn Hills” Press tells Bloomberg. After all, about 50 percent of Chrysler’s 3,188 dealers generate 90 percent of its retail sales.
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I'm sticking to my prediction of "The Great Car Shortage of 2011". Fewer cars being made, fewer dealerships and lots of folks driving around in clunkers that have to be replaced eventually. It's a basic fact of life: People need a car to get to the job, to school and the supermarket. This is true, no matter how bad the economy is. Where are all of these new cars coming from?
I thought one of the "good" things about bankruptcy is it would allow mfrs to re-organize existing contracts with dealers and labor orgs? Yet the bulk of the responses here seem to be "oh, crap, look at all the jobs lost!" Jobs are being lost anyway (due to low sales), this just seems to push up the timetable a bit. As an aside, the local Saturn dealer closed as part of GM's restructuring / cost saving efforts. The owner reports that GM offered to buy every car on the lot. Which is something they were not about to get from their customers; selling a handful of cars every couple weeks it would take years to sell the hundreds they had. Public reaction: "We had a Saturn Dealer?" Almost all employees (much fewer than 50 worked there) were moved to another GM dealer across the highway owned by the same folks.
That Boch advert kinda jilts the gaydar, doesn't it?