Rejected GM and Chrysler Dealers Launch YouTube Channel

Robert Farago
by Robert Farago

Make no mistake: GM and Chrysler went into bankruptcy horrendously over-dealered. GM was carrying more than twice Toyota’s 1500 dealers (with a lot less than twice the market share). The automakers’ needed to cut their franchise network down to size for reasons elucidated here on numerous occasions. The fact that the culled dealers are dogging the federally-subsidized carmakers for cash—well, you, really—is neither here nor there. It’s on YouTube! In their own words . . .

Videos posted here are true stories of private Auto Dealers that had their dlshps [time is money!] shut down for no reason by the “Car Czars” (Auto Task Force). Hear their stories. As many as 3389 dealerships are proposed for closure affecting 169,652 Direct Jobs. We are fighting for our rights in a free enterprise country. Congress has introduced House Bill HR2743 & Senate Bill S1304 to Restore the Rights of Auto Dealers. The outcome of this matter will impact the lives of EVERY privately capitalized businessman/woman in America and will effect communities everywhere forever. Government can not sit back now and support and economic model that abandons proven successful business models. This is their chance to restore 169,652 direct jobs for FREE. Not only is there the ability to right this wrong, but there is a duty to do so to protect economic freedoms that every American deserves. Please contact your members of Congress to encourage their support !!

Robert Farago
Robert Farago

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  • Power6 Power6 on Oct 01, 2009

    @jacad you bring up some great points, and I have to agree that this process seems to have been done arbitrarily which is the tragedy, although I can't really think of any other options that would have worked better. Wouldn't starving the dealers until the strong ones survived resulted in just as much uproar and claims of unfairness? I don't know too much about the dealer biz, but I do understand what "channel stuffing" is, and I know that part of the wonder of badge engineering for decades now has been done to appease dealers screaming for a product in every niche for their brand. I also know that the required investments for ongoing business with these franchises often requires great expense for renovations and beautification of a dealership. How fair would it have been for GM to come down and tell the dealers of the remaining brands they will not be getting a full line for their brand, they will have a hard time getting hot products, and by the market share, they likely will not survive. GM would have to have a crystal ball to tell dealers to invest in anything new when they don't know if they are going to make it or not. The complaints would have been just as loud, and probably a much stickier situation, because all of the dealers would have had franchise agreements to cry about, rather than a portion of dealers not getting renewed. You are mistaken to say that GM will lose "customers" when the dealerships go away. If the Dunkin' Donuts' down the street closes, I will go to the other one to get the same coffee, unless maybe that franchisee was a buddy of mine who DD treated unfairly. Maybe that is the lesson here, GM has too long been building cars for dealers, and forgetting who the customer really is. Case in point, look who got their Camaros before the pre-order customers did...the dealers.

  • Porschespeed Porschespeed on Oct 01, 2009
    The only customer GM has is dealers since in all fifty states it is illegal to sell direct to the public. GM has never been able to support with real numbers that dealers cost them anything but rather produce revenues in car sales and parts sales. They have now eliminated 50% of their brands and 40% of their dealer representation. You've already admitted that the dealer system is a matter of law. You do realize who wrote those laws? Dealers and their lobbyists. If a consumer wishes to purchase a product that is only available at, say Best Buy, then Best Buy captures that sale. Doesn't matter if there is one Best Buy or ten. So, if you can serve your consumer with 2 outlets instead of 10, you become more efficient. More efficient for the seller and more eficient for the producer. Sony can much more efficiently/cheaply serve 2 retail outlets than 10. If you need service, you go to a factory service center. Warranty work, factory service center. Sure they can be franchised outlets. Put 'em against a factory operated unit in the same market, see who wins. Parts? Kidding right? There are already national auto parts chains. Not really difficult to distribute product in factory boxes right down that line. Just like business is supposed to be done. As to Sloan, those who support his theories apparently miss that his principles are the ones that have led GM to where it is today.
  • Jacad Jacad on Oct 02, 2009

    "Factory service center". Now there is the pure definition of oxymoron!

  • Porschespeed Porschespeed on Oct 02, 2009
    “Factory service center”. Now there is the pure definition of oxymoron! Vis-a-vis "dealer service"? Perhaps the same side of different coins.