Bailout Watch 545: GM Dealer Kiss Off Could Cost Feds $1.3 Billion

by Robert Farago

June 3rd, 2009 8:41 PM

bailout watch 545 gm dealer kiss off could cost feds 1 3 billion

Chrysler Co-Prez Jim Press and GM CEO Fritz Henderson faced congressional opprobrium this afternoon, as our duly elected representatives lamented the fact that the two zombie automakers are pulling the rug from under the pols’ financial backers—I mean, cutting car dealers. Never mind the bollocks; the bailout bonanza just got a big bigger. Detroit News reports that Henderson told the Senate that “GM could have 3,500-3,800 dealers by the end of next year, a reduction of 2,300-2,600 dealers. He said the reductions were painful but unavoidable.” Applying this morning’s pay-off formula (an average of $500,000 per dealer), that raises the price of the federally-sponsored sayonara to $1.1 billion to $1.3 billion. But don’t worry, ’cause Fritz feels their pain and promises this is the last last time GM will downsize.

“I do not see our dealers as ‘dots on a map’ or ‘lines on a spread sheet.’ Many of these dealers have passed on their franchise through generations. They are members of a larger GM family which makes this process so heart-wrenching for me . . . This is our last chance to get it right — to fix permanently those parts of the business that have diverted us from consistently building winning cars and trucks and the consumer experience to match. Because of today’s global, economic crisis we are out of time and money.”

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U mad scientist on Jun 04, 2009
New management? What new management? The new management is the old management. I hope people remember this claim and own up to it when the gov hands off management to whomever they can find to run the joint. I mean, it already happen in Chrysler's case, so I'm not sure why people think it's never happen in GM's. - No. A customer boycott reduces the cash burn time between now and when the federal government finally gives up trying to run a car company. Since the whole point of the exercise is to retain jobs, they'll just cut prices until the cars sell, so... - If they throw in the towel soon before truck models become outdated a successful car company may be able to pick up the pieces You mean like fiat with chrysler, and decent possibility of renault/nissan with GM? Coincidentally, you already have a bunch of Non-TARP [s]retards[/s] Saviors of Capitalism desiring more than 2bil for their assets. How much do you think they would've gotten if the fed hadn't been generous with that deal? - This thinking is the end result of what happens to people when the D or the R next to their name matters more than what reality actually is. I assure you people are perfectly capable of in being idiots without an extension to their name. For example, you don't have one. In general it helps to have a decent argument. I suggest working on that instead of a D name extension.

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GM Brian S on Jun 04, 2009

It is stupid for GM to close dealerships; how is this going to save them money? They make money off of dealerships in a number of ways, like selling them parts, and brochures. Cutting dealerships, means less revenue, and spending big bucks to shut them down. If they just let things run the natural course, a large number of them will go out of business any way. Some of the ones that were not cut are on the verge of BK any way, GM is hoping to save some of their big points that have been poorly run, by wiping out the competition. So let's get rid of a little guy that is doing a great job, but not selling as many cars because they don't want to compete in a deceptive manner (like Bill Heard)

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Unleashed on Jun 04, 2009
And Obama’s middle name is Hussein, so he MUST be a dictator. He's a radical, his friends are radical, his policies are pretty radical too. Just look at what he's doing with GM. Pretty obvious unless you posses a progressive mindset.

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U mad scientist on Jun 04, 2009
He’s a radical, his friends are radical, his policies are pretty radical too. Sure, I guess if you have extremely low standards for accurately defining what words and ideas mean like [s]most[/s] all conservatives, you can assert that anyone is anything. It also helps to have no real sense of history, very little intellectual curiosity, and willingness to think within very narrowly defined bounds.

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