“No one’s paying me for my sandwich shop, ” commented Bill A., when asked about the empty dealerships around the corner from his store. “I lost alot of business when two dealers closed around me, but I just went to work marketing to replace those accounts.  If my franchise corporation comes in and closes me down for lack of performance, who’s fault is that? MINE.  I couldn’t get a hand-out from the feds, no way.  If you do good business, you live to play another day.” Still dealership principals are contesting the bailout agreement as trampling on individual state franchise laws. However, the manufacturers control the franchisees, and every operator is held to strict standards of operation. There were no surprises as the economy stalled. The dealers knew what was coming as customers and inventory, credit lines and financing became scarce. The handwriting was on the wall, last year’s models on the lots. At this time the House of Representatives Appropriations Committee has passed this latest effort aptly titled  The Automobile Dealer Economic Rights Restoration Act of 2009, (from Bloomberg: )

“I don’t think Chrysler or GM has been able to demonstrate there is savings associated with fewer dealerships, since the dealers themselves bear the cost of operating their dealerships with little help from the manufacturers,” said Representative Steve LaTourette, an Ohio Republican who sponsored the amendment. “It’s the most un-American thing for the government to help force you out of business.”
GM spokesman Greg Martin said the amendment would “nullify” bankruptcy court-approved plans to pare the company’s dealer network and “put our long-term viability at risk.” He said GM intends to close about 2400 dealerships in October 2010, leaving the company with between 3500 and 3800 outlets.
General Motors is expected to exit from bankruptcy proceedings as early as tomorrow.  The entire House will likely take up the bill next week. It will then move on to the Senate.” –from Bloomberg/NPR)   IMHO, I hope Congress doesn’t buckle and give in to these demands to reopen the dealerships, as such action will only add a new liability to the reorganized companies, and the country. Imagine the tangled web of lawsuits over every severance package, factory closure and lost pension encompassed in this massive government-induced homicide.  The cost to the taxpayers could be twice the BILLIONS already spent and then some.  The President has come out strongly against this effort, his own Car CZARS clearly stated they did NOT want to be involved in running these car companies, and it was up to GM and Chrysler to make themselves viable after BK.  Are the dealers looking for a settlement to go away quietly? Well that remains to be seen, but this economy can’t afford any more automotive extortion.  The best response a closed dealer can have is to look for a competing product; Fiat, Cherry or TATA will be happy to move into these old digs, and prove the dealer can make money selling cars (any brand) in these troubled times. “Work, not welfare,”  has long been the battle cry of business, so now the shoe’s on the other foot. Stop whining, let’s put our heads down, shoulder to shoulder and get to work with the money that’s already been spent. Let the new Chrysler and GM prove they know how to make and market cars American’s want to buy from dealers that know how to treat the customer. —————————————————————————————————————————————————————————————-

NEED AUTO FINANCE HELP or CREDIT report repair go to tell them MY CARLADY: Sarah Lee sent you. It’s a free consult and they do the right thing by you, fast, easy, cheap. eCreditAdvisor

Top learn more about getting your best car deal click here: CAR DEALS Sarah Lee is an automotive executive with 20+ years of experience. She writes about Cars, and is a staunch consumer advocate on car related subjects. Her company: MY CARLADY is a car buyer’s service committed to getting you the best deal on your next new or pre-owned vehicle. You can reach her at www.mycarlady.com

 

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