Bailout Watch 572: What Will It Take to Get You Out of a Dealership Today?
More testimony over the fate of GM and Chrysler’s culled dealers yesterday revealed possible compromises, although consensus is still elusive. Chrysler VP and Associate General Counsel Lou Ann Van Der Wiele told the House Judiciary Committee (via the NYT) to ignore the pleas of Chrysler’s 789 slashed dealers, explaining that dealer reinstatement would be the end of Chrysler as we’re getting to know it. “Legislation aimed at reversing some of the painful but necessary actions taken during Old Carco’s bankruptcy will simply take Chrysler back to the future that Old Carco faced not long ago—and this time, without the option of a purchaser for substantially all of its assets. Complete liquidation, with all of its dire consequences, could follow.” But then, “complete liquidation with all its dire consequences” could follow if The New Chrysler ate the wrong tuna sandwich.
Meanwhile, GM took advantage of ChryCo’s histrionics to make itself look good by comparison. The General revealed that will pay a grand total of $600 million to its wound-down dealers, reports the Detroit News. That breaks down to $1,000 per vehicle, plus eight months of rent assistance. Plus, GM is offering its culled dealers the right of first proposal for new dealership openings.
Not that the offer to return to the bosom of the company at some undefined future point has dealers jumping for joy. “I would not trust GM’s right of first proposal, or any other deal, because they have not dealt morally or ethically with us,” Tamara Darvish of the Committee to Restore Dealer Rights tells Automotive News [sub]. “This is a very narrow offer, just one element of the overall set of issues,” adds NADA spokesman David Hyatt. “It would be a much better approach for us to wait for a broader package.” Funny how nobody is questioning why more dealerships would be opening at all. But, hey, at least GM is trying . . . Chrysler isn’t even offering hypothetical restitution.
The Walking Eye on Jul 24, 2009‘Bankruptcy’ It doesn’t matter how the numbers end up or how you play them. Once a car company has filed for Chapter 11, dealers will be cut. That’s it. End of story. Yeah, it’s hilarious how many consider it a right to have special legal protection despite the fact that everyone knows what bankruptcy is. I mean, maybe some should be rescued and continue to be subsidized through cash on the hood, but the gov has already saved the majority of dealers by not letting the car companies liquidate. So a portion gets cut, boo hoo, plant and workers and management got cut, too. The tone here in the comments has gone from "we gotta get rid of at least 1/2 the dealers" pre-bankruptcy to "we gotta protect all the dealers" post-bankruptcy. I can't tell you if the same people are arguing both, but this whole thing is NIMBY. So it seems now the prevailing thoughts to many are, "yeah, dealers need to close but not the one in MY town." In Milford, OH a CDJ dealer got cut. They converted to a large used dealer as they're part of the Kerry Automotive group (so that kinda thing can work out for them). I talked to them yesterday and the guy was disappointed but they're still in business.
Bryanska on Jul 24, 2009
We're messing with the free market, which is like messing with nature... Geo-engineering in the economy on a big scale. Bankruptcy is like a forest fire. It clears out dead brush. Those who are afraid to lose unsustainable businesses are operating on the assumption that no new businesses will open and eveything has been invented already.
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- MRF 95 T-Bird Sears and JC Whitney also had similar dune buggy kits. The VW accessories along with the running gear for legal use just bolted on. Hmm Amazon? A Bradley GT or Kelmark kit using an electric “skateboard” platform would also be cool.
- Inside Looking Out Cadillac now associates with rap music. In the past it was all about rock'n'roll. Rap is environmentally friendlier than rock'n'roll.
- EBFlex This is nothing compared to what Ford is doing. The fake lightning is seeing massive price increases for 2023. Remember how they self pleasured themselves about the fake lightning starting under $40k? In 2023, the price jumps by a very Tesla like $7,000. And that’s not the biggest price jump. And much less talked about, the government fleet discounts are going away. So for a basic 3.3L Explorer, the price is jumping $8,500. S basic F150 is also now $8,500 more. Im sure the same people that complained about the oil companies making “obscene profits” will say the same thing about Ford.
- Bobbysirhan Sometimes it seems like GM has accepted that the customers they still have are never going to come to their senses and that there aren't any new dupes on the horizon, so they might as well milk their existing cows harder.
- Buickman how about LowIQ?