U.S. House Passes Bill That Could Force GM and Chrysler to Reopen Closed Dealers

I really hope this doesn't go any futher. The dealers that were forced to close were all under performers or rip off dealers.

The ones that closed where I live (Fitzgerald Auto Mall, Reed Brothers, Montrose Dodge, Darcars were all well known for the deceptive practises and were always ranked poorly on customer satisfaction surveys conducted by third party companies.

Having been at most of those dealers in the past, they make looking and buying a car the worst experience you can have.

Now there are other dealers in my area I wish would go the same direction. (Criswell, EuroMotors, Sport) Someone please forcefully close thier doors down too.

Oh and ---------

What was the criteria for the weeding? Whether or not they supported Obama's election campaign. What do you think?

Obviously, a business looks at the numbers. A dealership should be mathematically eliminated (ie, not making money), common sense for business says to cut the tie. Problem here is, several of the dealers cut claim they WERE making a profit. Hence, all this hub bub.

The govt should keep its mits off free enterprise and stop taking money out of the people's pockets without their say. That's my story and I'm sticking to it. :)

No notice?

How about we are filling bankruptcy...?
I mean a credit agency or bank doesn't say, "That's alright we will let this months payment slide because your broke..." F that.

Shitty dealers deserve to be put under, that helps the playing field for everyone. Where I live one "entity" owns like all the brands, which kind of sucks because they are more of the our price or no deal mindset. So if you want a deal you'll be driving to find it, which isn't a problem if you ask me.

With government come no accountability. The government doesn't want to run GM my ass.

No dealer should be denied the opportunity to compete. Let all the dealers compete, survival of the fittest.

One more thing that pisses me off. GM runs its business with a great amount of incompetence that it has to file for bankruptcy borrow money from the Government just to stay alive, then turns around to a dealer that runs it business properly with profit & tells that dealer you need to close up...That's bullshit..

Ridiculous...

While there are a percentage of dealers that did need closing (the town next to mine had 2 rival GM dealerships within 600ft of each other; the small one closed), some of them lost a bunch of money desperately trying to liquidate inventory before the deadline.

Now they are going to get "forced" to open back up? While I doubt the bill will pass, I'd like to see it try and happen just so I can pay even more in taxes next year when Uncle Sam coughs up countless more billions on this pipe dream.

Here's some crazy logic the government might want to consider. When a GM or Chrysler dealership can't keep up with local demand, open another dealership. Otherwise you'll just have 2 dealerships sitting on their hands (at the taxpayers expense).

This is EXACTLY why after 25 years in the auto industry I finally called it quits when I got laid off in January. I now work for a national corporation that's growing, makes a profit, and paid 400 million CASH for the facility I'm now employed at.

Even though Obama opposes the bill, he is still to blame for taking over Government Motors in the first place. He said that GM would be free to run their business except for major decisions. Perhaps that might be true it he was the only one involved, but it sounds to me like _every_ decision is going to be a major decision.

This is absolutely ridiculous. Tax payer money to bailout these failures and then more tax money the first time that GM does something that is half-way smart. I've always felt that there are _far_ too many GM dealers. There are 14 dealers within 20 miles of where I live! (according to google maps search for 'gm dealers')

Even though Obama opposes the bill, he is still to blame for taking over Government Motors in the first place. He said that GM would be free to run their business except for major decisions. Perhaps that might be true it he was the only one involved, but it sounds to me like _every_ decision is going to be a major decision.

This is absolutely ridiculous. Tax payer money to bailout these failures and then more tax money the first time that GM does something that is half-way smart. I've always felt that there are _far_ too many GM dealers. There are 14 dealers within 20 miles of where I live! (according to google maps search for 'gm dealers')

It's a poor decision to reopen those dealerships, whether they were successful businesses or not for the owners. GM and Chrysler have to spend lots of money in support of every dealer. Tools (both technical and sales) training (again both technical and sales), inventory (so the lots don't look empty) all cost GM lots of money to produce in support of too many dealers. BY reducing the number of dealers, GM can focus on supporting a smaller number of technical and sales staff, with better training and better tools, for less money. A smaller network of dealers, with better trained staff at each makes for a stronger business model.

The situation is complex.

Dealerships make their money in a lot of ways. They sell new cars, they sell used cars. They have parts and services.

You have to combine all these aspects together to get a good idea of how a dealership makes money. A dealer can be very profitable selling very little new cars by selling lots of used cars and a services and parts biz.

Because of this, there were a lot of dealerships that were forced to close that were profitable even though they didn't sell a lot of new cars. Dealers actually make a lot of money selling used cars, because they wholesale for so cheap compared to the retail. With new cars, you can find out the real invoice of what the dealer cost is for the car. With used cars, you don't know. So dealers can make off very well selling used. Profit margins are higher.

On one hand, forcing a profitable dealership to close kills jobs in the community. There are lots of people who work for that dealership who are now out of a job, even though that dealership was profitable on its own. And that in turn kills area businesses and the community (dealerships are often big time community sponsors).

On the other hand, too many dealers is bad because dealers need inventory. And manufacturers are forced to create more cars than they really need to in order to support dealers. This kills profit on new cars. On top of that, there is now a surplus of new cars that customers aren't buying, and dealers must eat into their own profit to sell the cars. Profit margins in new cars are small, smaller with domestics because of their legacy overhead, and then manufactures gotta use rebates to move them. And THEN, dealers are in competition with themselves on trying to move cars that people sometimes don't want to buy. The result is a business with a very small margins....and this is one stuff that cost 10s of thousands of dollars. Not good.

So, who do you save? Anyway you cut it, you got job loss. Its either going to be dealership level, or at the manufacturer. If a dealer goes down, but a company lives on, then there is a chance that another dealership may take its place down the road if things get better. However if manufacturer goes bust, then its dealers go bust too and thats that. So its the lesser (slightly) of the two evils. Its loose-loose, but its better than a loose-looseWorst.

The situation is complex.

Dealerships make their money in a lot of ways. They sell new cars, they sell used cars. They have parts and services.

You have to combine all these aspects together to get a good idea of how a dealership makes money. A dealer can be very profitable selling very little new cars by selling lots of used cars and a services and parts biz.

Because of this, there were a lot of dealerships that were forced to close that were profitable even though they didn't sell a lot of new cars. Dealers actually make a lot of money selling used cars, because they wholesale for so cheap compared to the retail. With new cars, you can find out the real invoice of what the dealer cost is for the car. With used cars, you don't know. So dealers can make off very well selling used. Profit margins are higher.

On one hand, forcing a profitable dealership to close kills jobs in the community. There are lots of people who work for that dealership who are now out of a job, even though that dealership was profitable on its own. And that in turn kills area businesses and the community (dealerships are often big time community sponsors).

On the other hand, too many dealers is bad because dealers need inventory. And manufacturers are forced to create more cars than they really need to in order to support dealers. This kills profit on new cars. On top of that, there is now a surplus of new cars that customers aren't buying, and dealers must eat into their own profit to sell the cars. Profit margins in new cars are small, smaller with domestics because of their legacy overhead, and then manufactures gotta use rebates to move them. And THEN, dealers are in competition with themselves on trying to move cars that people sometimes don't want to buy. The result is a business with a very small margins....and this is one stuff that cost 10s of thousands of dollars. Not good.

So, who do you save? Anyway you cut it, you got job loss. Its either going to be dealership level, or at the manufacturer. If a dealer goes down, but a company lives on, then there is a chance that another dealership may take its place down the road if things get better. However if manufacturer goes bust, then its dealers go bust too and thats that. So its the lesser (slightly) of the two evils. Its loose-loose, but its better than a loose-looseWorst.