Topic: Nearly 800 US Chrysler Dealers to Close followed by 2400 Gm Dealers

[toolatecrew]

http://money.cnn.com/2009/05/14/news/companies/gm_dealers/?postversion=2009051416

On Thursday, Chrysler LLC's announced that it is dropping nearly 800 Chrysler, Dodge and Jeep dealers, or about a quarter of its network, as part of its bankruptcy restructuring.

The next auto businesses on the chopping block will be 2,600 General Motors dealerships.

GM Chief Executive Fritz Henderson said Monday that the company would by the end of the week start notifying dealerships it wants to eliminate over the course of the next year. The company said last month that it planned to eventually eliminate 42% of its 6,250 dealer locations, which employ more than 300,000 workers among them.

Has to be done but boy those are some big numbers. Its an even tougher pill to swallow when its tied to Billions in government $ being given to companies that has a low likleyhood of being repaid.

Now that I think about it most auto sales people are largley or even 100% commison are they not? Doesn't look good for severance packages for these guys . Certainly doesn't look great for them to find new jobs.

[Leviathan]

Chrysler closing 789 dealerships

...
Chrysler had a total of 3,181 authorized dealers in operation at the time of its April 30 bankruptcy court filing, according to court filings. Just over half of that number accounted for more than 90% of Chrysler sales, according to the filing.
...
About half the dealerships being closed sell fewer than 100 vehicles per year, Landry said in a conference call. About 44% also sell vehicles other than Chrysler products, he said.
...

There will be some babies in all that bathwater but it sounds like the cull was needed.

ts an even tougher pill to swallow when its tied to Billions in government $ being given to companies that has a low likleyhood of being repaid.

You should put that in your signature block to save yourself some typing 

[Honda Owner]

And at the same time the Chrysler execs are  trying to get themselves classified as Fiat employees so they can jack their salaries over the $500,000 per annum ceiling! Gotta love it, they never learn!

[safristi]

..Fiat employees...............Nardelli and Iaccocca..................surely U jest.............. ...maybe Lutzi can cross ov'r...................

[tenpenny]

I saw a news report on one US station that some of these dealerships only sold 35 new cars per year.  That's 3 per month.  Not even one per week.

[Leviathan]

And at the same time the Chrysler execs are  trying to get themselves classified as Fiat employees so they can jack their salaries over the $500,000 per annum ceiling! Gotta love it, they never learn!

BTW,  people - all people - take car of #1 first. You wouldn't take advantage of selling a stock at $1.00 when it is really worth $.01 or take advantage of a "loophole" to get > $500,000/year salary? Thought not....

[Juke1]

The US dealers often sell 2 products maybe more, like last time I was in Springfield Virginia, the Ford dealer there also sold Nissan and I saw others though I forget.  I think it would make sense to close such dealership as a japanese model would likely hurt the sales of the equivalent US model.  To me it would make sense to have to force the dealer to commit.  When we look at the Chrysler list I noticed one was also selling Nissan, so what are the odds that he has become solely a Nissan dealer?

[safristi]

MULTIDEALERSHIPISM....................... I baggs the TATA dealership and Chinese BIG BUICKS onna back LOT..................man am i gonna be RICH or  LUCKY!!!!

[Schmengie]

Has there been any word on how all of this is going to affect Canadian dealerships? Vernon is a pretty small town with a population of around 45,000 including the Municipality of Coldstream, not enough to support Mazda, Mitsubishi, and Suzuki among others. Vernon Kia couldn't make a go of it and went out of business a few weeks ago. There's not even a Saturn dealer here, yet we have 2 of the valley's largest GM dealers within a few blocks of each other, Bannister Chevrolet and Walthers Pontiac Buick. With Olds long gone, the Pontiac brand -up and Hummer, Saab and Saturn on death's door it seems to me that something has to give.

[CSH]

What will this do to used car prices?

[Schmengie]

What will this do to used car prices?

If a lot of Canadian dealers are forced to close like in the US, prices for new domestic cars should tank in the short term while all that inventory is being disposed of. I think prices for used cars will go down too, but by how much is anyone's guess. 

[dr_spock]

What will this do to used car prices?

It depends on the demand for used Chysler products.  It could lower demand and prices if there aren't too many places to service them with the closure of dealerships. 

[ovr50]

Has there been any word on how all of this is going to affect Canadian dealerships? Vernon is a pretty small town with a population of around 45,000 including the Municipality of Coldstream, not enough to support Mazda, Mitsubishi, and Suzuki among others. Vernon Kia couldn't make a go of it and went out of business a few weeks ago. There's not even a Saturn dealer here, yet we have 2 of the valley's largest GM dealers within a few blocks of each other, Bannister Chevrolet and Walthers Pontiac Buick. With Olds long gone, the Pontiac brand -up and Hummer, Saab and Saturn on death's door it seems to me that something has to give.

My guess is that Vernon will lose one of those 2 GMs, but it may depend on the volume each one is doing. In addition, there are 2 large GMs in Kelowna, for an area pop of about 165K. Penticton has 1 GM for sure (maybe 2, I forget). There used to be one in Oliver as well, IIRC.

Maybe, in total, too many for the this valley with a total pop of about 250K. Don't know??