Washington Business Daily

How does closing down a car dealership help since they are private franchises?

These dealers are the people that buy the cars from the Union, so doesn't that actually give them LESS people to buy the cars? People buy from dealers not from the factories.

Public Comments

1. I guess putting 200k people out of a job is supposed to help somehow.
2. Obviously they aren't private if they can be shut down... DUH! If someone is dumb enough to try and buy a car from a factory for resale the companies aren't going to deny them. I just love how the first person cries that it is putting people out of the job. Probably the same person complaining that they didn't push the union workers out when there was a lack of work.
3. It simply doesn't help
4. I don't understand that logic either. The only thing I can think of is that it reduces the competition among the same brand so if you want to buy a GM car you only have one nearby option to purchase it and you have to pay what they are asking.
5. True but the idea is that the car company will have to get much much smaller when it comes out of bankruptcy so they will need less dealers because they will have less cars to sell
6. They actually get a kickback from the car maker for every car they sell. Maybe that's one of the reasons.
7. It helps because the auto makers, not the unions, have a contractual obligation to provide the dealers with vehicles to sell. When they terminate the contracts, it means they no longer have to provide the dealers with vehicles. GM loses money on every car it builds. So, if they are obligated to make fewer cars, they lose less money.
8. I think that is a really good point, and up until recently just took it at face value. It is reducing business, employment and American prosperity for many... Just another move to nationalize all business, and go Communist.
9. Toyota sells twice as many cars with half as many dealerships. If you want to fix a bankrupt company, you have to find out where they are wasting money. Having too many dealerships creates tons of extra costs such as paperwork. Some of these chrylser dealerships were across the street from eachother...i know of 2 within 2 miles in long island. That is a waste of chryslers/taxpayers money.
10. It really means that the guy making decisions is a complete fool and has no business in business. Here's the deal...if all you've ever been is a polotician who has lived off the public trough, you have absolutely no ability to make business decisions...so ...shut the hell up...
11. Great question this is all so OBAMA can control the big 3 and make them make his GREEN cars that NO body wants! This happened back in the 80's didn't work! Another fine example of TOO much government control!!!
12. newsflash... people are no longer buying as many cars as before. Period. If cars ARE NOT SELLING, they close stores/ dealerships. The population of the US has not changed. The population of the US has this issue with unemployment. No jobs.. no car sales. No car sales.. dealers don't buy more cars.
13. Closing down a dealership helps surviving dealers. This is because there is less competition. However a lot of people will have to drive further to buy or service their cars or trucks. And a lot of people will view the closing of dealers as a red flag, to avoid GM or Chrysler vehicles altogether. I wouldn't buy a GM or Chrysler. Would you?
14. You are making perfect sense if you asume that the administration wants to keep the economy running. However, it doesn't. O wants to overwhelm and break the economy so that he can rebuild it the socialist centrally controlled way he wants it.
15. I think it works more on consignment...meaning, the factories ship the cars to the dealers but do not get their cut until the cars are sold. So an Authorized dealer (authorized by the factory) can get 20 brand new cars place on their lot without forking over a dime...the alternative is that the dealer would pay out $400,000 for 20 cars factory priced at $20,000 each but then they are stuck with them whether they sell or not. Most of the cars still on those dealers lots that are being closed belong to the factory....the dealers have not paid for them so they do not own those vehicles. If the dealers wanted to shell out the full amount owed to the factory I am sure they could stay in business but not as an Authorized dealer but as an Independent dealer.
16. i dont know i have a freind that works for a dealer in a rather remote area of wva they sell about 150 new cars a year even in this slow period more when things are good. and lots of used cars they are the only dealership for 60 miles that sells the brand and has a factory service center they do tons of repair work.they got a letter last week giving them the choice to cancel their contract now or 2010 .when it closes there will be about 25 jobs gone from a very small area and people will have to drive 30 to 60 miles to find a really good mechenic or buy a car .
17. The factories have been closing down for 2 years, It's the brilliance of trickle down economics,1st the factories, then the dealerships that depend on them. it amazes me that Those in the Republican party(the party of Business) have such little understanding of business. maybe that explains why big business has had such a free ride in ruining our country in the last 40 years.
18. Oh that's an easy question...It doesn't actually do ANYTHING!!!...But the government has to act like they are doing something...so i guess they think putting thousands of people out of jobs is better than nothing....I would prefer they just did nothing then maybe those people would still have jobs
19. My understanding is that "closing" may not be the most accurate term. It's more like they are terminating a contract and business relationship. The dealership cannot use the manufacturer name and brand any longer, and will not receive any new cars and, depending upon the contract, kickbacks for cars already on the lot or be reimbursed for repairs done under warranty, etc. All the things that you typically associate with a manufacturer dealership. Of course, that's assuming the manufacturer isn't in bankruptcy like Chrysler. Once they're in bankruptcy most contractual obligations are thrown ou the window and the dealer may not be able to sell his inventory back to the manufacturer. In that case, they'll be at the whim of other dealerships and consumers who can smell the blood in the water, so to speak. I never thought I'd feel sorry for a car salesman...come to think of it, I'm still not sure I am. If you want a Chrysler, now is the time to buy from a closed dealership.
20. CHANGE YOU CAN BELIEVE IN!!!! Wrong, they are owned by the Federal Government. Our mental midgets in Washington, gave them our money, then suggested they file for bankruptcy. Now they don't have to pay us back. Now the car company is owned by the federal government. CHANGE YOU CAN BELIEVE IN!!!